Private ruling: CGT - main residence
Date of advice: 17 May 2023
Published: 10 July 2023
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a full main residence exemption on your share of the sale of the property? | A1: No.

Relevant facts and circumstances: Property Z was purchased by your parents before 1985. The property was your parent's main residence until they moved and rented the property out several years later. The property was rented for several years. Your parents separated, and title was transferred to one of your parents as part of the separation settlement. You and your sibling along with your parent moved back into the property in the year of separation. Your parent passed away a couple of years later. As part of their estate, you and your sibling were left the property and it could be transferred when you were both older. The property was transferred to you and your sibling in a number of years later as tenants in common. After your parent's death you and your sibling moved in with your other parent and the property was rented for a few years. You and your sibling along with your parent moved back into the property and you have lived there using the property as your main residence up until the present day. You have been living interstate and overseas a several years. You have not treated any other property as your main residence since leaving. You elect to use the absence rule to treat the property as your main residence in your absence. You have maintained a bedroom at the property, and it is available to you at all times. You keep your possessions at the property. You return to the property on a regular basis. You contribute to the expenses associated with the property. For a period of time an individual room was rented out to a 3rd party. You and your parent remained in the property. You declared your share of the rental income in your tax return. You claimed deductions in your tax return against the rental income. Your parent and sibling remain living in the property. You and your sibling intend on selling the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-200

Reasons for decision: Summary: You are not entitled to a full main residence exemption on your share of the property as part of the property was used to derive assessable income during your ownership period. Are you entitled to a partial main residence exemption on your share of the sale of the property? Where a full exemption is not available, you may be entitled to a partial exemption under section 118-200 of the Income Tax Assessment Act 1997 (ITAA 1997). You calculate your capital gain or capital loss as follows: > Non-main residence days - numbers of days in the period from the date of death You are entitled to a partial main residence exemption. You will need to calculate the exemption taking into consideration the renting of the room and the period of time it was rented.