Private ruling: CGT - main residence exemption
Date of advice: 2 December 2021
Published: March 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to claim the main residence exemption on the sale of vacant land following the destruction of the dwelling on your property? | A1: Yes. You are each entitled to the full main residence exemption in relation to your 50% ownership interest. The effect of making the absence choice is that the property continues to be your main residence for capital gains purposes from when you moved out of it until you sold it. As a result, you are able to treat your vacant land as if the dwelling had not been destroyed and was your main residence. Further information about your home and land after a disaster can be found by searching 'QC 50171' on ato.gov.au.

Relevant facts and circumstances: Several years ago, you and your spouse purchased a vacant block of land. You purchased it each with an equal ownership interest. The following year, a dwelling was completed on the land and you moved into the dwelling. Several years later, you began renting out the dwelling. Several years after this, the dwelling was destroyed. Following the destruction of the dwelling, you received a lump sum payment including an amount for destruction of the dwelling and an amount for demolition costs. The following year, you sold the vacant block of land. You have chosen to treat the dwelling and subsequent vacant land as your main residence throughout your ownership period.

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 118-160