Taxation Determination TD 95/7







[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]: 1. No. A taxpayer can, in relation to an overseas dwelling that has ceased to be his or her main residence before becoming a resident of Australia, make a choice that section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to treat the dwelling as having continued to be their main residence in their absence, subject to the other requirements of that provision being satisfied. | 2. Although for Australian tax purposes subsection 855-45(3) deems an acquisition date for certain assets on a non-resident becoming an Australian resident taxpayer, this does not mean that the assets were not owned by the taxpayer before the taxpayer became a resident. If the taxpayer owned a dwelling overseas and it ceased to be the taxpayer's main residence on the taxpayer becoming an Australian resident, section 118-145 can apply. | Example: In July 2007, Sarah, a UK resident, moved permanently to Australia. She was unable to sell her UK home (which she had bought in 1987) before her departure. As a result, Sarah decided to rent the property. She did not purchase a dwelling in Australia. | In April 2008, her tenant made an offer to purchase the UK property. Sarah accepted the offer and settlement took place the following month. | In preparing her 2007-08 income tax return, Sarah made a choice that section 118-145 apply for the period she was absent from her UK dwelling. The effect of making the choice is that the capital gain or loss made from the sale of her UK property is disregarded in calculating Sarah's net capital gain or loss for the year. | Commissioner of Taxation 20/4/95 | Previously issued as Draft TD 94/D97


Legislative references: ITAA 1997 118-145 ITAA 1997 768-950 ITAA 1997 855-45 ITAA 1997 855-45(3) ITAA 1997 995-1
Subject references: CGT exemption CGT main residence exemption Absence choice