Private ruling: Capital gains tax - main residence exemption
Date of advice: 5 May 2017
Published: September 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Is the capital gain or capital loss made on the disposal of a specific address disregarded? | A1: Yes


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 118-110

Reasons for decision: Detailed Reasoning - Capital gains tax: Capital gains tax (CGT) is the tax you pay on any capital gain you make and include on your annual tax return. There is no separate tax on capital gains; it is merely a component of your income tax. You are taxed on your net capital gain at your marginal tax rate. You make a capital gain or capital loss if a CGT event happens. The most common CGT event happens when you dispose of an asset to someone else, for example, if you sell or give away an asset. A capital gain or capital loss will occur when a capital gains tax (CGT) event happens to a CGT asset. The most common CGT event is CGT event A1 which occurs when a CGT asset is disposed of. | Detailed Reasoning - Main residence exemption: Generally, you can fully disregard a capital gain or capital loss made on the sale of a dwelling that is your main residence if: The dwelling was your home for the whole period you owned it The dwelling was not used to produce assessable income; and any land on which the dwelling is situated is not more than 2 hectares In your circumstances, you acquired an interest in a dwelling and used the dwelling as your main residence and as accordingly you are able to disregard any capital gain or capital loss.

Relevant facts: You acquired an interest in a dwelling. (the dwelling) | You moved into the dwelling as soon as practical after settlement and resided in the dwelling during your ownership period. | You do not own any other residential property in Australia or Internationally. | You sold the dwelling and settlement occurred in 2017.