Private ruling: Capital gains tax - intended main residence
Published: July 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: After 30 June 2006

Ruling: Q1: Is the dwelling in Australia considered to be your main residence? | A1: No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Since early 2000, you and your spouse have been on overseas postings. X years ago you and your spouse were planning to move back to Australia and once again become residents of Australia. X years ago you and your spouse jointly purchased a property (the property) in Australia. You and your spouse intended to use the property as your principle place of residence upon your return to Australia in the future. The property remained vacant from the date of purchase to approximately four years ago as you were reliant on securing work in Australia to enable you and your spouse to return to Australia. Approximately Y years ago you were offered a posting in another foreign country (including a residence) which you accepted in light of no appropriate work prospects in Australia. Your relocation to the foreign country was planned for approximately four years ago. Approximately four years ago the property was rented out and tenants moved in. You and your spouse had some furniture in the property and on your visits to Australia you and your spouse stayed at the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-110

Reasons for decision: Detailed Reasoning - Main residence: The term main residence is not defined in the Income Tax Assessment Act 1997 and takes its ordinary legal meaning which is worked out objectively and with the benefit of hindsight. The following factors may be relevant in working out whether a dwelling is your main residence: · the length of time you live there - there is no minimum time a person has to live in a home before it is considered to be their main residence · whether your family lives there · whether you have moved your personal belongings into the home · the address to which your mail is delivered · your address on the electoral roll · the connection of services (for exampled, phone, gas or electricity) · your intention in occupying the dwelling. The mere intention to occupy a dwelling as your main residence - without actually doing so - does not allow an individual under the capital gains tax provision to elect a dwelling as their main residence. In your case, you and your spouse have never established the property as your main residence. You and your spouse have resided overseas since early 2000. We consider you and your spouse used the property as a holiday home during your visits to Australia and it is currently now being used for investment purpose. Therefore, the property is not considered to be your main residence. The Commissioner does not any discretionary powers to allow an individual to treat a dwelling as their main residence where they have not established it as their main residence.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.