Private ruling: CGT - Main Residence Exemption
Date of advice: 23 January 2025
Published: 17 March 2025
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can the executors of the deceased estate treat Property B as the main residence of the Deceased by applying the absence provision under section 110-145 of the Income Tax Assessment 1997 (ITAA 1997) for a CGT event? | A1: Yes. | Q2: Can the executors of the Estate of the Deceased disregard the capital gain from the CGT event A1 in relation to the disposal of Property B under section 118-195 of the ITAA 1997? | A2: Yes.

Relevant facts and circumstances: The Deceased is an Australian resident. The Deceased acquired Property A before 20 September 1985. The Deceased lived in the property for several years until they acquired Property B after 20 September 1985 where they commenced residing in Property B. The Deceased retained Property A. Property A was never rented or used for any income producing purposes. The Deceased did not change their electoral role from Property A. The Deceased maintained a single PO box in the same city as Property A. New furniture and household effects were purchased by the Deceased and their spouse when establishing their new home in Property B. All personal effects were always at Property B. They had strong social and community ties in the area. Property B was never income producing or ever intended to be income producing. Some time prior to the Deceased's passing, their mobility was severely impaired and they spent most of their time at Property A as it was a more convenient location for their care. Overall, they spent more years living in Property B than Property A. Prior to the Deceased's passing, the executors of their estate applied for and received probate of their will. At the time of the Deceased's passing, Property A and B were fully furnished and contained all the items that would customarily be found in an individual's home. Property B was disposed of within 2 years of the Deceased's death resulting in a capital gain.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-145 | Income Tax Assessment Act 1997 section 118-195