Private ruling: CGT - main residence exemption
Date of advice: 9 June 2022
Published: August 2022
Ruling period: Year ended 30 June 20XX.
Date scheme commenced: 1 July 20XX.

Ruling: Q1: Can you choose to continue to treat the property located at XXXXXXXX as your main residence under section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997) for the period in which you were absent from the property? | A1: Yes, having considered your circumstances and the relevant factors, under the absence rule in section 118-145 of the ITAA 1997 you can continue treating your former home as your main residence for up to 6 years for capital gains tax purposes for the period in which you were absent from the property. However, you cannot treat any other property as your main residence for the time you applied the absence rule to your former home. Further information about this discretion can be found by entering 'QC 66030' and 'QC 66032' into the search bar at ato.gov.au

Relevant facts and circumstances: Sometime ago you finished building three separate dwellings at the property. The three dwelling are A, B and C. Once the dwellings were complete you moved into dwelling B, and you used it as your main residence. Shortly after the completion of the dwellings you sold dwelling A and dwelling C. For approximately 12 months you resided in dwelling B. You and your partner purchased a new dwelling (new dwelling). You moved into the new dwelling with your partner. You rented out dwelling B when you moved into the new dwelling. Nearly six years after you rented out dwelling B, dwelling B was sold. You included all rental income and deductions in your tax returns from the time you rented dwelling B out until it was sold. You understand that you cannot treat the new dwelling as your main residence for the period you applied the absence rule to dwelling B. You understand that if you sell the new dwelling you will be liable for CGT on your ownership interest for the period you applied the absence rule to dwelling B.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 section 118-145