Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 118.178

  (1)   This section applies to you if:

  (a)   you * acquired an * ownership interest in a * dwelling from another person (your former partner ) as a result of a * CGT event (the earlier event ); and

  (b)   your former partner acquired the ownership interest on or after 20   September 1985; and

  (c)   there was a roll - over under Subdivision   126 - A (marriage or relationship breakdown roll - over) for the earlier event; and

  (d)   a CGT event (the later event ) happens in relation to the ownership interest.

  (2)   This Subdivision applies to the later event in the way that it would if:

  (a)   your * ownership interest had commenced when your former partner's ownership interest commenced (the acquisition time ); and

  (b)   from the acquisition time until the time your former partner's ownership interest ended:

  (i)   you had used the * dwelling in the same way that your former partner used it; and

  (ii)   the dwelling had been your main residence for the same number of days as it was your former partner's main residence.

Example 1:   Peter (the transferor spouse) is the 100% owner of a dwelling that he uses only as a main residence before transferring it to Susan (the transferee spouse). Susan uses the dwelling only as a rental property.

  Susan will be eligible for a partial main residence exemption having regard to how both Peter and Susan used the dwelling if, at the time the dwelling is sold, Susan is an Australian resident.

Example 2:   Caroline (the transferor spouse) is the 100% owner of a dwelling that she uses only as a rental property before transferring it to David (the transferee spouse). David uses the dwelling only as a main residence.

  David will be eligible for only a partial main residence exemption having regard to how both Caroline and David used the dwelling if, at the time the dwelling is sold, David is an Australian resident.