Private ruling: Capital gains tax - disposal of dwelling acquired prior to 20 September 1985
Published: May 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Is the capital gain or capital loss made on the disposal of your dwelling disregarded? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Prior to 20 September 1985, you and your spouse jointly purchased a dwelling (property A) which you established as your main residence. Prior to 20 September 1985 the title to property A was transferred solely into your name. After 20 September 1985, you moved into another dwelling (property B), which you established as your main residence. You unsuccessfully attempted to dispose of property A, a number of years ago. Property A was rented out for a period of years. Settlement of the disposal of property A occurred early in the relevant year. You have supplied a copy of documentation to support your application and this documentation is to be read with and forms part of your application for the purpose of this ruling.

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

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. Capital gains tax (CGT) is the tax you pay on certain capital gains you make. You may make a capital gain or capital loss as a result of a CGT event. The most common event is CGT event A1. CGT event A1 happens when you dispose of an asset to someone else, for example, the disposal of a dwelling. CGT event A1 occurred on the disposal of property A. However, a capital gain or capital loss you make is disregarded if you acquired the asset before 20 September 1985. In your case, you acquired two interests in property A. The first interest was acquired when you and your spouse jointly purchased property A and the second interest was acquired when your spouse's interest was transferred into your name. As you acquired both interests in property A prior to 20 September 1985, any capital gain or capital loss you make on its disposal is disregarded.