s.118-170 ITAA97 Spouse having different main residence - restrictions on exemption.
s.995-1(1) ITAA97 definition of spouse - includes individuals in a registered relationship, and individuals living together in a domestic relationship as a couple. The use of the word "includes" means also a spouse within the ordinary meaning.
Does "separated couple" = still married ?
Are they purchasing property before they have entered into a property settlement ?
Waaaay too many variables for anyone to give a simple yes/no answer.