Private ruling: Capital gains tax - main residence - spouse separate main residence
Published: June 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2011

Ruling: Q1: Do you have two main residences from the date you and your spouse commenced to live together until the first interest was transferred? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 103-25 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 118-110 | Income Tax Assessment Act 1997 Section 118-140 | Income Tax Assessment Act 1997 Section 118-145 | Income Tax Assessment Act 1997 Subsection 118-145(2) | Income Tax Assessment Act 1997 Section 118-170 | Income Tax Assessment Act 1997 Section 118-185

Reasons for decision: Summary: Section 118-140 of the Income Tax Assessment Act 1936 provides a special rule that treats you as having two main residences for up to six months. The rule applies if you acquire an ownership interest in a dwelling that is to become your main residence and you still have your ownership interest in your existing main residence, both dwellings are treated as your main residence for the shorter of: · six months ending when your ownership interest in your existing main residence ends; or · the period between the acquisition of the new ownership interest and the time when the ownership interest referred to above ends. this only applies if: · your existing main residence was your main residence for a continuous period of at least three months in the 12 months ending when your ownership interest in it ends; and · your existing main residence was not used for the purpose of producing assessable income in any part of that 12 month period when it was not your main residence. You acquired a 50% interest in property 'B' in after 30 June 2010. Property 'B' was your main residence at the time you acquired your interest in property 'B'. However, as you have not disposed of your remaining 50% interest in Property 'A' the special rule does not apply as your ownership of your existing dwelling has not ended and you are not considered to have two main residences from the time that you and your spouse commenced to live together until the first interest was transferred.

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. | Relevant facts: You own a property which you acquired after 20 September 1985 (Property 'A') | You were recently married. | Your spouse has a property (Property 'B') | You resided with your spouse at property 'A' | You often visited property 'B' however you regarded property 'A' to be your main residence during this period. | You moved to property 'A' and now consider this property to be your main residence. | You and your spouse decided to transfer 50% of your interest in the properties to each other. | The transfers were completed with the transfer of the interest in property 'B' to you around 2010. | The transfer of the interest in property 'A' to your spouse was completed around 2011.