I was living overseas in a house that I own and returned to Australia in 2022 for a period of 11 months, during which time I was an Australian tax resident. I understand that resuming Australian tax residency triggers a CGT event (I1) whereby I am deemed to have acquired my overseas home. And in leaving Australia I am deemed to have sold this same property.
The problem is that the exchange rate concerned moved significantly over the period from deemed acquisition to deemed disposal and I believe I am liable for a substantial capital gain that only occurred on paper, having neither purchased nor sold at these dates.
Since this property was my main residence prior to moving to Australia and was rented out for less than 6 years, am I able to claim the Main Residence exemption (MRE) for CGT purposes for this property? I understand the exemption is not available to non-residents however I consider that at the date I left Australia and therefore am considered to have sold the asset I was still considered an Australian tax resident. Is this correct?
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