Private ruling: CGT - main residence discount
Date of advice: 7 November 2023
Published: 18 December 2023
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the capital gain on the sale of your residential property be a discount capital gain with a discount amount of 50% under Division 115 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. CGT discount applies as you have held the property since a specified date, being longer than 12 months. The fact that the original house was demolished, and a new house was built does not change the acquisition date of the property.

Relevant facts and circumstances: You purchased the property on a specified date for a specified amount. Some years later, you decided to demolish your house to build a new house with the intention of living in the house with your child and grandchild. At a specified date, you then commenced subdividing the land and the excess vacant land was sold. You kept the second block of vacant land to build your new property. The new property was due to be completed in a specified month but due to Covid it was not completed until at a specified month more than one year later. In a specified month of 20XX, your child decided to move to a different location, you made the decision a few months later that you would relocate with her. You entered into a contract to sell your property on a specified date for a specified amount, with settlement occurring on a specified date. The house and land were sold as a single transaction with a profit.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 115-10 | Income Tax Assessment Act 1997 section 115-15 | Income Tax Assessment Act 1997 section 115-20 | Income Tax Assessment Act 1997 section 115-25