Q 1
6 months rule and example
If you acquire a new home before you dispose of your old one, both dwellings are treated as your main residence for up to six months if:
· the old dwelling was your main residence for a continuous period of at least three months in the 12 months before you disposed of it
· you did not use it to produce assessable income in any part of that 12 months when it was not your main residence, and
· The new dwelling becomes your main residence.
If you dispose of the old dwelling within six months of acquiring the new one, both dwellings are exempt for the whole period between when you acquire the new one and dispose of the old one.
Adrian’s understanding is right.
Example from ATO
Exemption for both homes
Jill and Norman bought their new home under a contract that was settled in January and moved in immediately. They sold their old home under a contract that was settled in April. Both the old and new homes are treated as their main residence for the period January to April, even though they did not live in the old home during that period.
Q 2
First scenario
If it takes longer than six months to dispose of your old home, both homes are exempt only for the last six months before you dispose of the old one. If you decide to claim the main residence exemption for your new home from the time you first move in, then you obtain only a part exemption when a capital gains tax (CGT) event happens in relation to your old home.
That is an example from ATO
Example
Part exemption for a first home
Jeneen and John bought their first home under a contract that was settled on 1 January 1999 and moved in immediately. It was their main residence until they bought another home under a contract that was entered into on 2 November 2008 and settled on 1 January 2009.
They retained the old home after moving into the new one on 1 January 2009, but did not use the old one to produce income. They sold the old home under a contract that was settled on 1 October 2009. They owned this home for a total period of 3,927 days.
Both homes are treated as their main residence for the period 1 April 2009 to 1 October 2009, the last six months that Jeneen and John owned their first home. Therefore, if they do not choose to claim exemption for the entire period of ownership for their first home, it is treated as their main residence only for the period before settlement of their new home and during the last six months before settlement of the sale of the old home.
The 91 days from 1 January 2009 to 31 March 2009, when the old home was not their main residence, would then be taken into account in calculating the proportion of their capital gain that is taxable. In this case:
Taxable proportion
=
Days not main residence
Total days owned
=
91
3,927
Because they entered into the contract to acquire their old home before 11.45am (by legal time in the ACT) on 21 September 1999 and entered into the contract to sell it after that time, and they held it for at least 12 months, Jeneen and John can use either the indexation or the discount method to calculate their capital gain.
If it takes longer than six months to dispose of your old home, you may get an exemption for the old home for the period in excess of the six months by choosing to treat it as your main residence for that period under the 'continuing main residence status after dwelling ceases to be your main residence' rule. If you do this, you get only a partial exemption when you dispose of your new home.
Second scenario
If Adrian uses his Mt Hawthorn to produce income, he can choose to treat it as his main residence for up to six years after cease living in it. If, as a result of this choice, the dwelling is fully exempt, the home first used to produce income rule does not apply.
ATO Examples as below:
If you are absent more than once during the period you own the home, the six year maximum period that you can treat it as your main residence while you use it to produce income applies separately to each period of absence.
Example
One period of absence of 10 years
Home ceases to be the main residence and is used to produce income for one period of six years
Lisa bought a house after 20 September 1985 but stopped using it as her main residence for the 10 years immediately before she sold it. During this period, she rents it out for six years and leaves it vacant for four years
Lisa chooses to treat the dwelling as her main residence for the period after she ceased living in it, so she disregards any capital gain or capital loss she makes on the sale of the dwelling. The maximum period the dwelling can continue to be her main residence while it is used to produce income is six years. However, while the house is vacant, the period is unlimited, which means the exemption applies for the whole 10 years. It doesn't matter whether the period during which the home is used to produce income is a single block of six years or several shorter periods, so long as the total period it was used to produce income was no more than six years.
Because the dwelling is fully exempt as a result of Lisa making this choice, the home first used to produce income rule does not apply.
Home used to produce income for more than one period totalling six years
In the 10-year period after Lisa stopped living in the dwelling she rented it out for three years, left it vacant for two years, rented it out for the next three years, then once more left it vacant for two years.
If she chooses to treat the dwelling as her main residence for the period after she stopped living in it, she again disregards any capital gain or capital loss she makes on selling it. This is because the period she used the home to produce income during each absence is not more than six years.
Example
Home ceases to be the main residence and is used to produce income for more than six years during a single period of absence
1 July 1993
Ian settled a contract to buy a home in Sydney on 0.9 hectares of land and used it as his main residence.
1 January 1995
Ian was posted, by his employer, to Brisbane and settled a contract to buy another home there.
1 January 1995 to 31 December 1999
Ian rented out his Sydney home during the period he was posted to Brisbane.
31 December 1999
Ian settled a contract to sell his Brisbane home and the tenant in his Sydney home left. Ian chose not to claim the main residence exemption on the sale of the Brisbane property, so he had to include the capital gain in his return for that year.
The period of five years from 1995 to 1999 is the first period the Sydney home was used to produce income for the purpose of the six-year test.
1 January 2000
Ian was posted by his employer from Brisbane to Melbourne for three years and settled a contract to buy a home in Melbourne. He did not return to his Sydney home at this time.
1 March 2000
Ian again rented out his Sydney home - this time for two years.
28 February 2002
The tenant of his Sydney home left.
The period of two years from 2000 to 2002 is the second period the Sydney home was used to produce income under the six-year test.
31 December 2002
Ian sold his home in Melbourne. Ian chose not to claim the main residence exemption on the sale of this property.
31 December 2003
Ian returned to his home in Sydney and it again became his main residence.
28 February 2011
Ian settled a contract to sell his Sydney home.
As Ian did not claim the main residence exemption for either of his Brisbane or Melbourne homes he is able to choose to treat the Sydney home as his main residence for the period after he stopped living in it. Ian claims the exemption for this property.
Ian cannot obtain the main residence exemption for the whole period of ownership of the Sydney home because the combined periods it was used to produce income (1 January 1995 to 31 December 1999 and 1 March 2000 to 28 February 2002) total more than six years.
As a result, the Sydney house is not exempt for the period it was used to produce income that exceeds the six-year period - that is, one year.
If the capital gain on the disposal of the Sydney home is $250,000, the amount of the gain that is taxable is calculated as follows:
Period of ownership of the Sydney home:
1 July 1993 to 28 February 2011
6,452 days
Periods the Sydney home was used to produce income after Ian ceased living in it:
1 January 1995 to 31 December 1999
1,826 days
1 March 2000 to 28 February 2002
730 days
2,556 days
First six years the Sydney home was used to produce income:
1 January 1995 to 31 December 1999
1,826 days
1 March 2000 to 28 February 2001
365 days
2,191 days
Income producing period exceeding six years after Ian ceased living in it:
2,556 - 2,191 = 365 days
Proportion of capital gain taxable in 2010-11
$250,000 X
365
6,452
= $14,143
Because Ian entered into the contract to acquire the house before 11.45am (by legal time in the ACT) on 21 September 1999 and entered into the contract to sell it after that time, and owned it for at least 12 months, he can use either the indexation or the discount method to calculate his capital gain.
Note: 21 August 1996 importance
The home first used to produce income rule does not apply because the home was used by Ian to produce income before 21 August 1996.
Q 3 and Q 4
At the moment, I haven’t found clearly explanation regarding market replacement rule.
However, I found a good example from ATO website to prove when your house is partial exemption from CGT; the amount of CGT calculates the difference between the market value from the date you rent out and the market value at the time you sell it. Therefore, Adrian doesn’t need to keep those receipts. It is not relevant to calculate capital gain.
There is the information from ATO.
Partial exemption
You may be eligible for a partial main residence exemption if:
the dwelling was your main residence for only part of the period you owned it
your partner or dependants have separate homes
you have used part of the property (either the dwelling or the land) to produce assessable income, or
the land is more than 2 hectares.
Example: Home becomes a rental property after 20 August 1996
Erin purchased a home on 0.9 hectares of land in July 2000 for $280,000. The home was her main residence until she moved into a new home on 1 August 2003.
On 2 August 2003, she started to rent out the old home. At that time, the market value of the old home was $450,000.
Erin wants the new home to be treated as her main residence from the date she moved into it.
On 14 April 2010, Erin sold the old home for $496,000. Erin is taken to have acquired the old home for $450,000 on 2 August 2003 and calculates her capital gain to be $46,000.
Because Erin is taken to have acquired the new home on 2 August 2003, and has held it for more than 12 months, she can use the discount method to calculate her capital gain. As Erin has no capital losses she includes a capital gain of $23,000 on her 2011 tax return.
Reference:
http://www.ato.gov.au/content/36887.htm
http://www.ato.gov.au/individual ... =/content/36888.htm
http://www.ato.gov.au/corporate/ ... p;page=6#P189_12742 |
发表于 19-1-2013 17:39:18
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