Private ruling: Capital gains tax
Date of advice: 11 July 2018
Published: September 2018
Ruling period: Financial year ended 30 July 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will you be able to apply the full main residence exemption to a capital gain or loss you make on sale of the property pursuant to sections 118-110 and 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Having considered your circumstances, in conjunction with IT 2167 Income Tax: rental properties - non-economic rental, holiday home, share of residence, etc. cases, family trust cases , and TD 95/7 Income tax: capital gains: does subsection 855-45(3) of the Income Tax Assessment Act 1997 prevent a taxpayer from making a choice that section 118-145 of that Act apply to an overseas dwelling that the taxpayer owned before becoming a resident of Australia? , the Commissioner considers that your property was not used for an income producing purpose while you were an Australian resident for tax purposes. Therefore, you can choose to continue to treat the property as your main residence under section 118-145 of the ITAA 1997 and disregard the capital gain made on the sale of the property under section 118-110 of the ITAA 1997. Further information on the consequences of changing residency is available on our website ato.gov.au by entering QC52303 into the search bar at the top right of the page.

Relevant facts and circumstances: You purchased a property. You moved into the property with your family. You continued to pay the mortgage. In the 1990’s, you moved to Australia and became a permanent resident. You continued to make the mortgage payments while your family members lived in the property. In the late 1990’s, one of your family members took over the mortgage payments for the property. You did not have another main residence in Australia.

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