Private ruling: CGT - main residence exemption
Date of advice: 21 January 2025
Published: 17 March 2025
Ruling period: XX 20XX
Date scheme commenced: XX 20XX

Ruling: Q1: Can you disregard any capital gain you made from the sale of the property? | A1: Yes. The absence rule under section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a taxpayer to continue to treat a dwelling as their main residence for up to 6 years if they use the dwelling for the purpose of producing assessable income.

Relevant facts and circumstances: You and your spouse purchased the property as joint tenants after 20 September 1985. You and your spouse immediately claimed the property as your main residence. In 20XX, you and your spouse separated then divorced. You and your spouse agreed that you would acquire 100% ownership of the property and take over the property loan. You paid an amount to your ex-spouse in exchange. A few years later, you moved out of the dwelling and it became a rental property. On XX 20XX, you moved back into the property and commenced minor renovations This included new window blinds, new flooring, and repainting both the inside and outside of the house. On XX 20XX, you signed a contract of sale and settlement occurred one month later. You have not claimed another property as your main residence during the period.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 section 118-145 | Income Tax Assessment Act 1997 section 118-178