Private ruling: Capital gains tax
Date of advice: 14 September 2020
Published: November 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you disregard any capital gain or capital loss on the sale of your property? | A1: Yes

Relevant facts and circumstances: You and your spouse purchased the property before 1985. You have been living in the property as your main residence since the date of purchase. You do not choose another property as your main residence. The Council rezoned the area (which includes your property), which means that your property has been rezoned to commercial.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 104-10(5)

Reasons for decision: Summary: Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that you make a capital gain or loss as a result of a CGT event happening to a CGT asset in which you have an ownership interest. Buildings and land are CGT assets as defined under section 108-5 of the ITAA 1997 and the disposal of a CGT asset triggers a CGT event A1 under section 104-10 of the ITAA 1997. Subsection 104-10(5) of the ITAA 1997 contains an exception, where any capital gain or capital loss made is disregarded if the asset was acquired before 20 September 1985. In your case, you and your spouse acquired the property before 1985. Therefore, you can disregard any capital gain or capital loss on the sale of your property.