Private ruling: Capital gains tax - main residence
Published: March 2012
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2011

Ruling: Question and answer: | Are you entitled to disregard any capital gain or loss made on a property purchased prior to 20 September 1985? | Yes.

Relevant facts and circumstances: You purchased a property prior to 1985. You used the property as your main residence until you moved overseas a few years ago. You have been renting the property out.

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 108-5.

Reasons for decision: Summary: A capital gain or capital loss may arise if a capital gains tax (CGT) event happens to a CGT asset. A CGT asset is any kind of property, or legal or equitable right that is not property Subsection 108-5(1) of the Income Tax Assessment Act 1997 (ITAA 1997). Section 102-20 of the ITAA 1997 states that you make a capital gain or capital loss if and only if a CGT event happens. CGT events are the different types of transactions or happenings which may result in a capital gain or a capital loss. The disposal of a CGT asset is the most common CGT event and is referred to as CGT event A1 (section 104-10 of the ITAA 1997). A taxpayer disposes of a CGT asset if a change of ownership occurs from the taxpayer to another entity. Any capital gain or capital loss you make on the disposal of your CGT asset is disregarded if you acquired the asset before 20 September 1985 (pre-CGT). In your case, you acquired the property prior to 1985. Therefore any capital gain or capital loss made upon the disposal of the property is disregarded .

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