Private ruling: Capital gains tax
Date of advice: 30 January 2018
Published: June 2018
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Was the property your main residence? | A1: No.

Relevant facts and circumstances: You are a citizen of a foreign country. You and your partner live and work in the foreign country. You have a main residence in the foreign country. You are not a resident of Australia for taxation purposes. You purchased a property. You purchased the property for your adult children to live in. You stayed in the Australian property for a few weeks to assist your children to settle in. Each income year you held the property you spent the majority of the year outside Australia. All the utilities were in your children’s names. You sold the property.

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

Reasons for decision: Summary: Section 118-110 of the ITAA 1997 provides that you can disregard a capital gain or capital loss made from a CGT event that happens to a dwelling that is your main residence. To qualify for full exemption, the dwelling must have been your main residence for the whole period you owned it, the ownership period, and must not have been used to produce assessable income. The guide to Capital gains Tax sets out the factors that are taken into consideration when determining if a dwelling is a taxpayer’s main residence. Whether a dwelling is a taxpayer’s sole or principal residence is an issue which depends on the facts in each case. Some factors may include, but are not limited to: ● the length of time the taxpayer has lived in the dwelling ● the place of residence of the taxpayers family ● whether the taxpayer has moved his or her personal belongings into the dwelling ● the address to which the taxpayer has his or her mail delivered ● the taxpayers address on the Electoral Roll ● the connection of services such as telephone, gas and electricity ● the taxpayers intention in occupying the dwelling A mere intention to occupy a dwelling as your main residence without actually doing so is not sufficient to get the exemption. In your case the property was not your residence as, you are a non-resident of Australia, you purchased the property for your children to live in and you have only stayed in the property initially for several weeks to help them get settled in and for short visits when you came to Australia in subsequent income years. You did not reside in the property you have only stayed there on occasions. You normally live and work in the foreign country and have done so for many years. You have a main residence in the foreign country. Accordingly you cannot treat the property as your main residence under section 118-110 of the ITAA 1997.