MLC301 Principles of Income Tax Law - Assessment Questions

QUESTION 3. 11

Cynthia entered into a contract to purchase a house in September 2007 for $300 000. Settlement was in November 2007, and there was $10 000 of stamp duty payable.
Cynthia lived in the house till November 2009. At this time its market value was $400 000. She bought a new apartment in November 2009 and immediately moved into it. She continued to own her original house and rented it out. In July 2010 she spent $20 000 on renovating the rental property’s kitchen. However, by
November of the current tax year she got tired of being a landlord and signed a contract to sell her original rental property for $550 000. Settlement was on December of the current tax year.
i. Discuss the CGT consequences of the above facts; and
ii. Discuss whether the conclusion would be different if during November 2009, instead of buying an apartment to move into, Cynthia became the tenant of the apartment she moved into?