Topics on recent tax amendments on CGT (6)

Understanding Main Residence Exemption (MRE) for Foreign Residents with Life Events

For foreign residents, the Main Residence Exemption (MRE) from Capital Gains Tax (CGT) has specific qualifications, especially concerning life events within a six-year timeframe.

Eligibility for MRE

Foreign residents may still qualify for the MRE under certain conditions if they have been abroad for six years or less at the time of the CGT event. If certain significant life events occur during this period, they might be eligible for the exemption. These are the key points:

• Excluded Foreign Resident: If you have been a foreign resident for more than six years continuously at the time of the CGT event, the legislation classifies you as an ‘excluded foreign resident,’ and you are not eligible for the MRE, regardless of life events.

• Life Events Test: If you have been a foreign resident for six years or less, you may qualify for the MRE if you pass the 'life events test' at the time of the CGT event. The life events that qualify include:

  • Terminal medical condition of the taxpayer, their spouse, or their child (under 18) during the period of foreign residency.
  • Death of the taxpayer’s spouse or child (under 18) during the foreign residency period.
  • CGT event triggered by asset distribution following a divorce or separation involving the taxpayer and their spouse or ex-spouse.

Need Further Clarification?

The rules surrounding the MRE can be complex, particularly regarding how life events affect your tax situation. 

If you have any questions, feel free to contact Tax Ideas Accountants & Advisers at

+61 2 83181545 or book an appointment using our live calendar.