Taxation Laws Amendment Act (No. 3) 1997 (147 of 1997)

Schedule 5   Principal residence exemption from CGT

Part 1   Amendment of the Income Tax Assessment Act 1936

Division 3   Dwellings acquired from deceased persons: status of residence at time of death

30   At the end of section 160ZZQ

Add:

(22) If:

(a) apart from subsection (21), subsection (13), (13A), (14), (15), (17), (17A), (18), (19), (20) or (20C) would apply in respect of the disposal of a dwelling; and

(b) during all or part of the period (the exemption period ) mentioned in paragraph (21)(b), the dwelling was the sole or principal residence of the deceased person mentioned in whichever of those subsections would have applied; and

(c) immediately before the deceased person's death, the dwelling:

(i) was the deceased person's sole or principal residence; and

(ii) was not being used for the purpose of gaining or producing assessable income;

then:

(d) in having regard to the matter mentioned in paragraph (21)(e), the Commissioner must disregard so much of the exemption period as occurred before the death; and

(e) paragraph (21)(f) does not apply in respect of the disposal.

Note: This means that, in determining the amount of the capital gain or capital loss under subsection (21), the Commissioner must disregard any use of the dwelling before the death for the purpose of gaining or producing assessable income.

(23) To avoid doubt, for the purposes of subsection (21), a period may consist of a particular instant in time.