Explain why the receipts in Egerton-Warburton & Ors v DFC of T
(1934) 51 CLR 568 were assessable, but the receipts in IRC v
Ramsay (1935) 1 All ER 847 were treated as capital amounts.
Question 1 (10 Marks)
Angelina is married to Bradley. They each have two houses: ‘house
A’ and ‘house B’. Angelina and Bradley each own a 50% interest in
house A. Bradley owns an 80% interest in house B and Angelina
owns a 20% interest in house B. As Angelina and Bradley are both
busy actors who lead their own lives, they quite often live apart.
This year the sold both house A and house B. Angelina wants to
nominate house A as her main residence and Bradley wants to
nominate house B as his main residence. Advise Angelina and
Bradley as to how the main residence exemption will apply to them
assuming that (ignoring the exemption) a capital gain of $1m was
made on the sale of each house.
Advise Angelina and Bradley on the capital gains tax
consequences regarding the abovementioned transactions
for the 2014/2015 income year.