Private ruling: CGT - Main residence - gifted to child
Date of advice: 17 September 2019
Published: November 2019
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020

Ruling: Q1: Will the transfer of the property to your child be subject to capital gains tax? | A1: No. When the property is transferred, in a non-arm's length transaction, you are considered to have disposed of the dwelling at market value on date of transfer. However, the dwelling has been your main residence since acquisition and has not been used to derive assessable income. Accordingly, you are eligible for the main residence exemption.

Relevant facts and circumstances: You purchased a dwelling after 19 September 1985 and established the dwelling as your main residence. The dwelling has not been used to derive rental income. The land the dwelling is situated on is less than two hectares in size. You had been living in Australia for a number of years and confirmed you are a resident of Australia for taxation purposes. You will be departing Australia and gifting your main residence to your child. There will be no exchange of money for the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 112-20 | Income Tax Assessment Act 1997 Section 116-30 | Income Tax Assessment Act 1997 Section 118-110