Section 855-30 of the Income Tax Assessment Act 1997 ('ITAA 97') contains the 'principal asset test' for ascertaining whether a foreign resident will be required to recognise a capital gain on disposal of taxable Australian real property ('TARP').

Required: By reference to relevant caselaw and tax rulings (if any), explain how the principal asset test is applied in Australia.

Answer rating: 100% (QA)

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