Private ruling: CGT - capital losses
Date of advice: 21 January 2025
Published: 17 March 2025
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1:  | A1: Yes. You are entitled to disregard any capital gain or loss when you dispose of the dwelling because you did not rent the dwelling for periods of greater than the 6-year limit specified under section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997). Under section 118-145 of the ITAA 1997, the absence rule allows a taxpayer to choose to treat a dwelling as their main residence even though they no longer live in it. They can do so for up to 6 years after they vacate the dwelling. This choice needs to be made only for the income year that the capital gains tax event happens to the dwelling for example, the year that a taxpayer enters into a contract to sell it. If you make this choice, you cannot treat any other dwelling as your main residence for that period.

Relevant facts and circumstances: You purchased property A jointly with your ex-spouse. Property A was your main residence. You and your ex-spouse purchased property B. You moved from property A to live at property B. Property A was rented out to tenants. Property B was sold at a loss. You became the sole owner of property A. Property A was sold. You have been renting and have not owned another property since selling both properties. Property A was sold within six years from the date it became a rented property. You have not treated any other property as your main residence during this period.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 118-145


Subject: CGT - capital losses: Question Are you entitled to use the 6-year absence rule to disregard any capital gain or loss on disposal of your dwelling?