Private ruling: Capital gains tax
Date of advice: 1 July 2024
Published: 12 August 2024
Ruling period: Year ending 30 June 2025
Date scheme commenced: 1 July 1970

Ruling: Q1: Is any capital gain or loss you make due to the sale of the properties disregarded? | A1: Yes. Any capital gain or loss you make due to the sale of the properties is disregarded because you acquired them before 20 September 1985. Ceasing to be a resident of Australia does not change the date you acquired the properties for capital gains purposes.

Relevant facts and circumstances: Some 73 years ago, taxpayer 1 became a resident of Australia. Some 60 years ago, taxpayer 2 became a resident of Australia. Some 53 years ago, property 1 was acquired by the taxpayers as joint proprietors. Some 43 years ago, property 2 was acquired by taxpayer 1. Some 42 years ago, property 3 was acquired by the taxpayers, each acquiring a one-half share. The properties are pre-CGT assets, acquired prior to 20 September 1985. Since being acquired, the three properties have been continuously leased to arm's length tenants. Some 14 years ago, taxpayer 2 moved overseas and ceased being an Australian resident. Some 8 years ago, taxpayer 1 moved overseas and ceased being an Australian resident. Despite now being non-residents, the taxpayers lodge Australian tax returns for the Australian source income from the rental properties. The taxpayers are considering an offer by an unrelated purchaser, for the sale of the 3 properties together for $0,000,000. This offer will be accepted for the purpose of this ruling. The sale price of the properties has been apportioned for each property. Foreign resident capital gains withholding rate variations were approved for the 3 properties, varying the withholding rate to 0.00%.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 104-10(1) | Income Tax Assessment Act 1997 subsection 104-10(3)(a) | Income Tax Assessment Act 1997 subsection 104-10(5)(a)