馃攳
CPA Main Residence Exemption - Absences - YouTube
Channel: unknown
[0]
[Music]
[5]
common sticking point when it comes to
[7]
the main residence exemption relates to
[9]
choosing to treat a dwelling that was a
[11]
taxpayer's main residence as continuing
[14]
to be their main dwelling during an
[16]
absence in accordance with section 118 -
[19]
145 Nick is an IT software analyst
[24]
working in Melbourne and has received a
[26]
promotion that requires him to move to
[28]
Sydney nick has lived in his unit in an
[32]
inner Melbourne suburb for three years
[34]
and this is his main residence upon
[37]
moving to Sydney Nick rents an apartment
[39]
close to his new office and rents out
[42]
his Melbourne unit for five years his
[45]
unit is then occupied rent-free by his
[47]
sister for a further four years before
[50]
Nick decides to sell it and purchase a
[53]
property in Sydney during the nine year
[56]
period of absence from his main
[57]
residence nick has not claimed any other
[60]
dwelling as his main residence what we
[62]
need to consider is whether next absence
[64]
period has exceeded six years whilst
[67]
earning assessable income on the main
[69]
residence so Nick only received
[73]
assessable rental income for a five-year
[75]
period as his sister did not pay rent
[78]
therefore the unit is still deemed to be
[81]
his exempt main residence as the absence
[84]
period whilst earning assessable income
[86]
does not exceed six years consequently
[90]
he may disregard any capital gain or
[93]
loss on disposal now let's consider what
[96]
would happen if after the five year
[98]
period Nick instead returned and Reid
[101]
occupied his Melbourne dwelling as his
[103]
main residence but then left again to
[105]
relocate to Adelaide for work if Nick
[109]
rents out his unit for the four years
[111]
while he's in Adelaide and then decides
[113]
to sell he can still claim the absence
[116]
exemption this is because the exemption
[118]
for a six-year period whilst earning
[120]
assessable income resets when Nick
[123]
returns to live in his main residence
[125]
and of course the exemption period
[128]
remains indefinitely if the residence is
[131]
not used to earn income that
[133]
if Nick's sister was to stay there
[135]
rent-free Fiona
[137]
acquired a dwelling in Melbourne on the
[139]
1st of May 2000 which he initially
[142]
rented it out but then occupied as her
[145]
main residence after one year on the 1st
[147]
of May 2001 on the 1st of May 2005 she
[152]
moves to Perth she rents out her
[155]
Melbourne dwelling and buys a new
[156]
dwelling in Perth on the 30th of April
[161]
2016 she sells her Melbourne dwelling
[164]
Fiona can elect to treat her Melbourne
[167]
dwelling as her main residence
[168]
throughout her absence so long as she
[171]
does not claim her Perth dwelling at the
[173]
same time Fiona will evidence her choice
[176]
by the way she completes her tax return
[178]
for the year of disposal so she elects
[181]
for her Melbourne dwelling to be her
[183]
main residence until its sale then she
[185]
calculates her net capital gain by
[188]
treating the first six years of absence
[190]
as exempt the proportion of the capital
[193]
gain or loss that is disregarded is
[195]
based on the number of days the
[196]
Melbourne dwelling was used or deemed as
[199]
her main residence so the exempt days
[202]
are from the 1st of May 2001 to the 30th
[206]
of April 2011 noting that the 30th of
[209]
April 2011 is 6 years after she moved
[213]
out on the 1st of May 2005 and started
[216]
earning assessable income on the
[217]
property so the actual main residence
[221]
days are 1416 the deemed main residence
[225]
days of the first six years Fiona was
[228]
absent which is 2191 days the total
[233]
ownership period is from the 1st of May
[234]
2000 to the 30th of April 2016 when
[239]
Fiona sold the property this is five
[241]
thousand eight hundred and forty three
[243]
days so the proportion of the capital
[246]
gain disregarded is worked out by
[248]
dividing the total exempt days of 3651
[252]
by the total ownership period this is
[256]
0.625 or sixty two point five percent
[259]
and therefore sixty two point five
[261]
percent of any capital
[263]
gang or loss will be disregarded
Most Recent Videos:
You can go back to the homepage right here: Homepage