Private ruling: Capital Gains Tax - Main residence - absence rule
Published: December 2011
Ruling period: Income year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Is any capital gain made on the disposal of the inherited dwelling disregarded? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Capital gains tax (CGT) is the tax you pay on any capital gain that you make. A capital gain or capital loss is made as a result of a CGT event occurring. The sale of a dwelling is a CGT A1. CGT Main residence Exemption A capital gain or capital loss made in relation to a dwelling is disregarded if you are an individual and the dwelling passed to you as a beneficiary in a deceased estate if you satisfy the following conditions: If the deceased acquired the property before 20 September 1985: o your ownership interest in the dwelling ends within two years of the deceased's death, or o from the deceased's death until the your ownership interest ends, the dwelling was not used to produce income and it was also the main residence of one or more of the following persons: (a) the spouse of the deceased immediately before death (b) an individual who had a right to occupy the dwelling under the deceased's will, or (c) yours If the deceased acquired the ownership interest after 20 September 1985 and it was their main residence just before their death: o your ownership ends within two years of the deceased's death or o the dwelling was, from the deceased's death until your ownership ends, the main residence of one or more of: (a) the spouse of the deceased immediately before death, or (b) an individual who had a right to occupy the dwelling under the deceased's will, or (c) yours. In your case, you had two 50% interests in the dwelling. One interest was acquired on the death of your step-parent, the other was acquired on the death of your sibling. You resided at the property until you were in your mid twenties and regard the property as your main residence, you have made an absence choice to cover any period you did not physically reside in the dwelling. You disregard any capital gain made in respect of the first interest as the dwelling is taken to have been your main residence for all of your ownership period. The capital gain made on the interest you acquired from your sibling is disregarded as this interest was disposed of within two years of their death.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-5. | Income Tax Assessment Act 1997 Section 102-20. | Income Tax Assessment Act 1997 Section 118-145 | Income Tax Assessment Act 1997 Section 118-195 | Income Tax Assessment Act 1997 Section 118-197


Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You inherited a dwelling. | You inherited the dwelling as joint tenants with your sibling. | The dwelling was rented briefly. | The dwelling was then occupied by your sibling. | Your sibling passed away and the dwelling was disposed within two years of their death. | You resided at the dwelling for a period of time and at later periods when your sibling resided there. | You regarded the dwelling as your main residence. | You have not owned another dwelling. | For the purposes of this private ruling, you have made the absence choice in relation to the dwelling after you vacated it.