Private ruling: Capital gains tax main residence exemption
Date of advice: 12 November 2019
Published: January 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: If the two building on Lots one and two are disposed of in one transaction can a partial capital gains tax main residence exemption apply to both properties? | A1: Yes. Having considered your circumstances and the relevant factors it is accepted that the two dwellings are being used as a single place of residence; therefore you are entitled to a partial main residence exemption for both properties. Further information on apportioning the capital gains tax main residence exemption after using the dwelling for producing income can be found by searching 'QC 52191' on ato.gov.au

Relevant facts and circumstances: You and your spouse purchased the property in 20XY. You rented out the existing house until town planning permits were issued and then it was demolished. Building of the new dwellings started on early 20XX and the occupancy permit was issued mid 20XX. You applied to the council to subdivide the property. You entered into a contract to sell one of the dwellings. You moved into the remaining dwellings. You moved into the dwellings a short time after the occupancy permit was issued. You occupy the dwellings with your spouse and children. One dwelling is utilised as an area for the children to play in and sleeping quarters for you, your spouse and the youngest children. Another dwelling is used as sleeping quarters for the eldest child and for day to day cooking, dining and entertainment. You will sell both dwellings as a single unit to the same entity, on the same date and on the same contract.

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