Classy Cars Pty Ltd has made a small business election. Classy Cars purchases... Sarah purchased a small flat in Sydney on 14 December 2014 for $520,000 which she lived in until she was forced to move interstate in March 2018. Sarah lived in a rented apartment interstate and has not owned another property. Sarah returned to Sydney in March 2021 and then sold the flat in June 2021 for $750,000. Does Sarah have any CGT liability on the sale of her Sydney flat?

Select one:

a. No, because after the CGT discount, Sarah made a capital loss on the sale

b. No, as the Sydney flat remained her main residence for the whole period of ownership

c. Yes, as she rented out the Sydney flat for 2 years, she completely loses the CGT main residence exemption

d. Yes, as she rented out the Sydney flat for 2 years then this portion of her ownership period is subject to CGT liability