Private ruling: Income tax - capital gains tax
Date of advice: 11 March 2019
Published: May 2019
Ruling period: Period ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Can you apply section 118-192(2) of the Income Tax Assessment Act 1997 (ITAA1997) to work out the capital gain or capital loss on the disposal of your dwelling that ceased to be your main residence when you vacated and commenced renting it to tenants? | A1: Yes. Your dwelling is treated as having been acquired for its market value on the day that it was first used to produce assessable income, as you chose not to continue to treat it as your main residence under section 118-145 of the ITAA 1997 in the 2014 income year that the CGT event happened.

Relevant facts and circumstances: You acquired the dwelling which you established as your main residence. You vacated the dwelling and commenced renting it to tenants. You disposed of the dwelling. The dwelling ceased to be your main residence when you vacated it and you did not make a choice under section 118-145 of the ITAA 1997 to continue to treat it as your main residence.

Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 118-B | Income Tax Assessment Act 1997 section 118-145 | Income Tax Assessment Act 1997 section 118-185 | Income Tax Assessment Act 1997 section 118-190 | Income Tax Assessment Act 1997 section 118-195