Private ruling: Capital gains tax
Date of advice: 3 August 2023
Published: 11 September 2023
Ruling period: XX May 20XX to XX May 20XX
Date scheme commenced: XX May 20XX

Ruling: Q1: Can you disregard any capital gain or loss on disposal of the Property? | A1: Yes. A CGT asset acquired prior to 20 September 1985 is referred to as a "pre-CGT asset". The disposal of a pre-CGT asset is in most cases exempt from capital gains tax. In your case, you acquired the land and built a dwelling prior to 20 September 1985. Therefore, the land and the dwelling are pre-CGT assets and you can disregard any capital gain or loss you made on the disposal of them.

Relevant facts and circumstances: You acquired the Property in joint names with your spouse in 19XX. The Property consisted of more than 2 hectares of land. In 19XX you commenced building a house on the land. Construction was completed prior to 1985. You moved into it at that time and made it your main residence. There have been no further capital improvements to the Property. The Property was transferred to you as sole proprietor after you and your spouse were divorced. The Property has not been used as a business or to produce an income. You decided to sell the Property to fund your retirement as you are not entitled to an age pension. The Property was purchased by a developer (the Purchaser). The contract of sale was signed by all relevant parties on XX May 20XX. The sale price was $X. You received a deposit on signing of $X and $X when the purchaser became the registered proprietor. The balance is payable in accordance with the sales contract. Settlement of the sale does not occur until all monies have been made. The Purchaser, following settlement, agreed to allow you to remain in occupation of the dwelling on the Property subject to the terms and conditions of a separate agreement attached to the Contract of Sale. You are required to vacate the Property no later than XX May 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Paragraph 104-10(5)(a)