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1 If you sell Lot X and Lot X at the same time, are you eligible for the full main residence exemption in accordance with Subdivision 118-B of the Income Tax Assessment Act 1997 (ITAA 1997), on the sale of Lot X and Lot X?

1 Yes. Based on the nature of your usage and the Commissioner's view of the definition of 'dwelling' contained in Taxation Determination TD 1999/69 Income tax: capital gains: can the term 'dwelling' as defined in section 118-115 of the Income Tax Assessment Act 1997 include ore than one unit of accommodation? , the Commissioner is satisfied that the two properties (Lot X and Lot X) have been used together as a single dwelling and you are therefore eligible for the full main residence exemption on the sale of the property. Question 2 If you amalgamate Lot X and Lot X into a single title, can you claim the full main residence exemption in accordance with Subdivision 118-B of the ITAA 1997, on the sale of the amalgamated property? Answer 2 Yes.

The consolidation of the titles does not result in a CGT event (subsection 112-25(4) of the ITAA 1997). Based on the nature of your usage and the Commissioner's view of the definition of 'dwelling' contained in TD 1999/69, the Commissioner is satisfied that the two properties have been used together as a single dwelling and you are therefore, if you amalgamate the titles to Lot X and Lot X, you are eligible for the full main residence on the sale of the property. This ruling applies for the following periods : Year ending 30 June 20XX Year ending 30 June 20XX The scheme commenced on: 1 July 20XX

On XX XX 20XX, previous owners subdivided their land and created the following properties: 1.            Lot X 2.            Lot X Both Lot X and Lot X contain a separate dwelling and separate titles. On XX XX 20XX, your partner (Person B) purchased Lot X. On XX XX 20XX, the purchase of Lot X settled, Person B and their ex-spouse were listed on the property Title. Despite being registered on the Lot X Title, Person B's ex-spouse never lived in Lot X, only Person B moved into Lot X as his main residence. In XX 20XX, Person B became the sole owner of Lot X with the removal of their ex-spouse from the Title Deed. On XX XX 20XX, you moved into Lot X. Lot X remained in Person B's name. On XX XX 20XX, you purchased Lot X. On XX XX 20XX, the purchase of Lot X settled. On the purchase of Lot X, you and Person B had the intention to eventually move out of Lot X to live in Lot X because: •                     All bedrooms and bathrooms (other than one small guest bathroom) in Lot X are located upstairs.

•                     Prior to Lot X's purchase, Person B broke a bone in their leg. This made travelling upstairs inconvenient and made you and Person B realise the eventual need to 'future-proof' your home when you could no longer manage stairs; and •                     The house on Lot X is a single-story house. From the date of purchase, you always intended to consolidate the titles on Lot X and Lot X, but never got around to it. When you took possession of Lot X, you and Person B furnished Lot X to be a continuation of Lot X. The week you took possession of Lot X, you removed the wall separating Lot X and Lot X and repaved the driveways for Lot X and Lot X to be of consistent height and the same pebble-mix surface. After settlement of Lot X, you continued to reside in Lot X with Person B, and you moved your furniture and clothes to Lot X. Lot X was registered as your principal place of residence and address with the Australian Electoral Commission. Following the purchase of Lot X, you undertook the following: •                     You and Person B continued to reside in Lot X •                     Lot X was utilised to XX •                     Renovated the Lot X

•                     You and Person B primarily worked from home, one day every week, you both moved to work from the house on Lot X while Lot X was cleaned •                     Used the area between the houses on Lot X and Lot X as your outdoor entertainment area. •                     In 20XX, you installed a swimming pool on Lot X •                     Lot 2 was used to house and garage storage items •                     In 20XX, you and Person B briefly stayed in the house on Lot X when heating in the house on Lot X needed replacing •                     In 20XX, Person B left their employment premises and used Lot X to store work items. •                     Lot X was also used for visiting friends and family to reside in. The hot water system for Lot X is only accessible from the driveway of Lot X. At no point was Lot X or Lot X used to earn assessable income. You and Person B jointly contributed to expenses and outgoings for Lot X and Lot X. On XX XX 20XX, Person B (the Deceased) passed away and left a Will, bequeathing the whole of his real and personal estate to you. Lot X passed to you as the beneficiary of the Deceased's estate. You continue to live in Lot X.

You are considering amalgamating the titles for Lot X and Lot X

Income Tax Assessment Act 1997 subsection 112-25(4) Income Tax Assessment Act 1997 Subdivision 118-B Income Tax Assessment Act 1997 section 118-110 Income Tax Assessment Act 1997 section 118-115 Income Tax Assessment Act 1997 section 118-120 Income Tax Assessment Act 1997 section 118-195 Income Tax Assessment Act 1997 section 118-197