Private ruling: Capital gains tax marriage breakdown rollover
Date of advice: 27 February 2026
Published: 13 April 2026
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the marriage breakdown roll over in section 126-5 of the Income Tax Assessment Act 1997 (ITAA 1997) apply when you transfer your share of the property to your ex-spouse? | A1: Yes.

Relevant facts and circumstances: You are a non-resident of Australia for taxation purposes. You live in Country Z. You and your ex-spouse owned a property. You and your ex-spouse have separated. You and your ex-spouse have entered into consent orders in the family law Court of Country Z. You agreed to transfer your share of the property to your ex-spouse under the court orders. The transfer of your share of the property to your ex-spouse took place a number of weeks ago.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 126-5

Reasons for decision: Summary: Section 126-5 of the ITAA 1997 outlines that if an asset or an interest in an asset is transferred by a person to their spouse as a result of the breakdown of their marriage or relationship, a roll-over applies provided certain conditions are met. For the roll-over to apply, the capital gains tax (CGT) event must have happened because of: • an order of a court or court order made by consent under the Family Law Act 1975 or a similar law of a foreign country, • a court order under a state, territory or foreign law relating to breakdown of relationship between spouses. • a financial agreement made under Part VIIIA of the Family Law Act 1975 , • an award made in arbitration referred to in section 13H of the Family Law Act 1975 , or • something done under a written agreement that is binding because of a State law, Territory law or foreign law relating to breakdowns of relationships between spouses and because of such a law, prevents a court making an order about matters to which the agreement applies, or that is inconsistent with the terms of the agreement in relation to those matters, unless the agreement is varied or set aside. The court order entered into with your ex-spouse in Country Z meets the requirement for the roll over. You will not be required to pay any capital gains on this transfer.