Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 118 - Exemptions  

Subdivision 118-B - Main residence  

Compulsory acquisitions of adjacent land only

SECTION 118-245   CGT events happening only to adjacent land  

Total adjacent land is 2 hectares or less

118-245(1)    
A *capital gain or *capital loss you make from a *CGT event that happens in relation to land (the exempt land ), or your *ownership interest in it, is disregarded if:

(a) you are an individual; and

(b) the exempt land is all or part of a *dwelling ' s *adjacent land at the time of the CGT event; and

(c) the CGT event does not happen in relation to the dwelling and does not happen in relation to your ownership interest in the dwelling; and

(d) one of the following subparagraphs applies:

(i) the dwelling was your main residence throughout all or part of your *ownership period of the dwelling;

(ii) your ownership interest in the dwelling *passed to you as a beneficiary in a deceased estate;

(iii) you own your ownership interest in the dwelling as the trustee of a deceased estate; and

(e) section 118-250 (about compulsory acquisitions of adjacent land) applies to the CGT event and the exempt land; and

(f) the sum of the following is 2 hectares or less:

(i) the area of all of the dwelling ' s adjacent land at the time of the CGT event;

(ii) the area of the land immediately under the dwelling;

(iii) if this section applied to you for an earlier CGT event that involved reducing the area of the dwelling ' s adjacent land at the time of that earlier CGT event - that reduction in area.

Note:

You may get only a partial exemption for the gain or loss (see section 118-260 ).

Total adjacent land is more than 2 hectares

118-245(2)    
If:

(a) apart from paragraph (1)(f), subsection (1) would apply to the gain or loss; and

(b) you choose this subsection to apply to the gain or loss;

disregard so much of the gain or loss that relates to land (the exempt land ) within the *maximum exempt area for the *CGT event and the *dwelling.

Note:

You may get only a partial exemption for this portion of the gain or loss (see section 118-260 ).

No exemption if you are an excluded foreign resident

118-245(3)    

However, this section does not apply if, at the time the *CGT event happens, you:

(a) are an *excluded foreign resident; or

(b) are a foreign resident who does not satisfy the *life events test.