Private ruling: Capital gains tax - main residence
Ruling period: Year ended 30 June 2011. | Year ended 30 June 2012.
Date scheme commenced: 1 July 2010.

Ruling: Q1: Will property A be considered your main residence? | A1: No. | Q2: Will property A be exempt from capital gains tax? | A2: No.


Relevant legislative provisions: Income Tax Assessment Act Section 118-110

Reasons for decision: Summary: Determining whether or not a dwelling is your main residence: The following factors need to be considered when determining whether or not a dwelling is your main residence: · length of time the taxpayer has lived in the dwelling. · the place of residence of the taxpayers family. · whether the taxpayer has moved his or her personal belongings into the dwelling. · the address to which the taxpayer has his or her mail delivered. · the taxpayers address on the electoral roll. · the connection of services, such as telephone, gas and electricity; and · the taxpayers intention in occupying the dwelling. In this case you lived in property A for a number of years and during this time your family remained living in property B. You lived in property A during week days and returned to property B on weekends and school holidays. Your clothing and personal belongings were moved between each property on a regular basis and not kept permanently at property A. The address shown on your drivers licence, electoral role and income tax returns is property B. Based on these facts property A will not be considered your main residence, of the two dwellings that you have lived in, property B is considered to be your main residence. Main residence exemption: Generally, you can ignore a capital gain or capital loss from a capital gains tax (CGT) event that happens to a dwelling that is your main residence. To obtain the full exemption from CGT: · the dwelling must have been your home for the whole period you owned it. · the dwelling must not have been used to produce assessable income; and · the land on which the dwelling is situated must be two hectares or less. In this case the main residence exemption will not apply as property A is not considered your main residence and therefore will not be exempt from CGT.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You purchased property A. | You also returned to property B during school holidays. | You retired and returned to live with your family in property B. | Property A has been vacant since returning to property B. | For the purposes of this ruling you will sell property A. | Other references: Guide to capital gains tax 2009-10 - NAT 4151