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Cases

Tax Telegraph, November 2013

CasesAAT Case [2013] AATA 709, Re Keep and FCT

The taxpayer had purchased the property with his then de facto partner which they then later began to construct a house on this property. However, during construction, his relationship with his then partner ended. Months later, after construction had finished, he and his then ex-partner moved into the house so that they could “meet the requirements to sell the property 'without' being subject to CGT". The house was subsequently sold after a few months. A net capital gain on the sale of the property was included as income by the Commissioner, which the taxpayer disputed, claiming the main residence exemption applied.

The AAT determined that the taxpayer failed to prove the house had become his main residence “as soon as practicable after the work is finished” and that the house continued to be the taxpayer's main residence for at least 3 months as per the main residence exemption provisions of ITAA 1997. The AAT also was not satisfied that the newly constructed house was the taxpayer’s main residence citing various facts. The AAT consequently held the taxpayer had failed prove that the Commissioner’s assessment was incorrect.

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