Life event – Terminal medical condition
The term ‘terminal medical condition’ has the meaning given by Regulation 303-10.01 of the Income Tax Assessment Regulations 1997 and requires, amongst other things, that two medical practitioners, jointly or separately, have certified that the illness or injury the affected person suffers from is likely to result in their death within 24 months of the certification.
If either the taxpayer, their spouse or child under the age of 18 years suffers from a terminal medical condition as prescribed above at any time during the taxpayer’s period of foreign residency, then this element of the test will be satisfied. Therefore, a foreign resident who satisfies this element of the test and has been a foreign resident for a continuous period of six years or less may be eligible for the MRE (subject to the other usual requirements of the MRE also being met).
Life event – Death
In the event the taxpayer’s spouse or child (who is under 18 years of age at the time of death) dies during the taxpayer’s period of foreign residency, then this element of the test will be satisfied. As such, a foreign resident who satisfies this element of the test and has been a foreign resident for a continuous period of six years or less may be eligible for the MRE (subject to the other usual requirements of the MRE also being met).
Life event – Divorce or separation
If the CGT event (i.e., the disposal of the main residence) occurs because of a family law matter (as referred to in S.126-5(1)) that involves the taxpayer and their spouse (or ex-spouse), then this element of the test will be satisfied.
The matters referred to in S.126-5(1) involve the distribution of assets between the taxpayer and their spouse (or ex-spouse) in a family law context (e.g., in the event of divorce, separation or similar maintenance agreements). This also includes where an enforceable distribution takes place under a corresponding foreign law. It is important for the CGT event to have occurred because of one of the matters referred to in S.126-5(1), otherwise the life events test will not be satisfied, even if the matter occurred during the taxpayer’s period of foreign residency.
Where a foreign resident satisfies this element of the test and has been a foreign resident for a continuous period of six years or less, they may be eligible for the MRE (subject to the other usual requirements of the MRE also being met).