Private ruling: Capital gains tax - Main residence - disposal
Published: September 2013
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Is the capital gain disregarded on the sale of your property? | A1: Yes.


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

Reasons for decision: Summary: Generally, you can ignore a capital gain you make on the disposal of a dwelling that was your main residence if: · the dwelling was your main residence for the whole period you owned it, and · the property was not used to produce assessable income. However, the Commissioner has set out the following factors to be considered when determining if a dwelling is a person's main residence: · the length of time you live in the dwelling (there is no minimum time a person has to live in a home before it is considered to be their main residence) · whether your family lives there · whether you have moved your personal belongings into the home · the address to which your mail is delivered · your address on the electoral roll · the connection of services such as telephone, gas and electricity and · your intention in occupying the dwelling. In this case you moved your personal belongings into the property, you have resided in the property for a significant period of time and you have had the services connected. These factors indicate that the dwelling would be considered your main residence. The factors that do not indicate that the property A was your main residence are the fact that your spouse stayed in property B, most of your mail was redirected from property B to property A and you returned to property B most weekends. Weighing up all the factors, the Commissioner has accepted that property A was your main residence. Given the choice made by your spouse property A is considered to be your main residence for all of your ownership period and as such any capital gain is disregarded.

Relevant facts: You purchased a unit (property A). | You purchased the unit after 20 September 1985 as you were offered employment and required accommodation. | You and your spouse also own a property in a different state (property B). | You moved from the property B to property A personal items, including books, clothes, CDs, paintings, art works and ornaments as well as purchasing new items for the property. | You did not change your address to property A on the electoral roll, Income tax returns, drivers licence and motor vehicle insurance. | You listed property A for the property's insurance and your private health insurance. | You spent most of your annual leave during your ownership of property A visiting family and friends in Australia and overseas. | You regularly visited property B to see your spouse during your ownership of the property. | You cared for your parent who resided in the same state as property B on weekends up until their death. | You have not used property A to produce assessable income. | You sold property A after a number of years after accepting employment in another location. | Your spouse is treating property A as their main residence during your ownership period. | You made a capital gain as a result of the sale of the property.