Claiming a Capital Gains Tax exemption for a property takes more than just living in the place.
Claiming a Capital Gains Tax exemption for a property takes more than just living in the place, as one taxpayer found out when the Administrative Appeals Tribunal (ATT) ruled against him.
On completion of construction of the property, the man claimed that he had moved in straight away, in May/June of 2005. His relationship then broke up and he moved to his sister’s house in Queensland in September of that year. The house was sold in November and the man moved to the UK in December, resettling with his now wife.
A net capital gain of $114,675 was included in his tax assessment for 2006, which he disputed, citing that the property had been his main residence. Although the man produced evidence of construction, holding and sales costs, which were accepted by the Commissioner, this only reduced his CGT liability to $66,271.
The man failed to provide the ATT with evidence of the date that he moved into the home. There was no dated occupancy certificate or utility bills and the man’s mail had been sent to his sister’s address, from which he had also applied for a driving licence. Because he advised the ATO that he vacated the property in the first week of September, it was found that he had failed to establish the required three-month residency at the property.
For more details regarding this ruling and the criteria which you have to meet to claim a CGT exemption on a property, read SmartCompany’s report.