Private ruling: Capital gains tax
Date of advice: 25 October 2018
Published: February 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Can you apply the full main residence exemption on the disposal of your interest in a property and disregard the capital gain? | A1: Yes. You did not have an interest in any other dwelling as your main residence and the dwelling was your main residence throughout your ownership period. Further information can be found by searching 'QC 22168’ on ato.gov.au

Relevant facts and circumstances: In 19XX, more than 2 hectares of land was purchased by family members as the legal owners. On or around the same time your parents gave money in consideration to the legal owners allowing your parents to construct a residence on this land, now known as the property. At the financial cost to your parents, the legal owners then allowed your parents to reside in the constructed dwelling free of rent for their lifetime. You moved into the dwelling in 19XX to take care of your parents. Your Parent A passed away in 19XX and you became the full time carer for your Parent B. In 20XX, your Parent B executed a will and you were named as the sole beneficiary. In 20XX a Deed of Agreement (DOA) was executed between all parties, in association with the property. You provided a copy of the DOA in your application. The agreement also stipulated that allowed you to reside in the dwelling rent free for a period five years from the date of your Parent B’s death. The legal owners would be responsible for certain expenses and you would be responsible for certain expenses. When the property sold you would be entitled to the value of the dwelling. Your Parent B passed away in 20XX. In 20XX it was agreed by the remaining parties, the property would be sold. Independent land valuations were obtained by both parties. The valuation you obtained was used in preference to the valuation obtained by the legal owners. Each party paid their own cost for these valuations. The property sold in 20XX. Stipulated in the DOA, you agreed to pay the capital gain tax (CGT) to the legal owners upon sale.

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