Private ruling: CGT - main residence exemption
Date of advice: 2 December 2022
Published: 30 January 2023
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you able to claim the full main residence exemption for the sale of your property under section 118-110 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The property was your main residence throughout your ownership period, and you were an Australian resident for tax purposes when the property was sold, you are entitled to claim the main residence exemption. This is because for the periods you were absent the property was not utilised for income producing purposes and you did not select another residence as your main residence for CGT purposes.

Relevant facts and circumstances: You purchased the Property on XX XXXX 20XX, with a settlement date of XX XXXX 20XX. You and your spouse had a joint interest in the Property. On XX XXXX 20XX your son born on XX XXXX XXXX and daughter born on XX XXXX XX moved into the Property. On XX XXXX 20XX you and your spouse departed Australia to work overseas. You continued to be an Australian resident for tax purposes from XX XXXX 20XX to XX XXXX 20XX while you worked and lived overseas. On XX XXXX 20XX you and your spouse departed the overseas country to work in another country. You were a foreign resident for tax purposes from XX XXXX 20XX until you returned to Australia on XX XXXX 20XX and commenced living at the Property as your main residence. On XX XXXX 20XX your spouse returned to Australia to live at the Property. You worked overseas for several years and did not live in the Property for these periods; however, the Property was never used for income producing purposes and members of your family continued to live there. You resided in Australia for the entire financial year ended 30 XXXX 20XX. During the time you and your spouse owned the Property, you both did not claim the main residence exemption for any other property and your spouse nominated the Property as their main residence. The land on which the Property is on is less than 2 hectares. You entered a contract to sell the Property on XX XXXX 20XX, with a settlement date of XX XXXX 20XX. You will choose the Property as the main residence of both your daughter and your son under section 118-175 of the ITAA 1997 during the period XX XXXX 20XX to XX XXXX 20XX. You will choose to continue to treat the Property as your main residence under section 118-145 of the ITAA 1997 during the period XX XXXX 20XX to XX XXXX 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 section 118-145 | Income Tax Assessment Act 1997 section 118-170 | Income Tax Assessment Act 1997 section 118-175