| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012339204358
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Rental property expenses
Question 1
Are you entitled to declare all income and claim all expenses of the investment property from the date of the court order?
Answer
Yes.
Question 2
Are you entitled to declare all income and claim all expenses of the investment property from the date of the court order?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
Year ended 30 June 2015
The scheme commenced on
1 July 2011
Relevant facts
You and another person purchased an investment property.
As the result of a court order, the other person, among other things, was required to sell their share of the property to you for no consideration.
To date, the title has not been transferred to you because the other person has not finalised the necessary paperwork to affect the transfer.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Section 6-5
Reasons for decision
The income and loss from a rental property must be shared in the proportion of ownership.
Taxation Ruling TR 93/32 states that the net income or loss from a rental property must be shared according to the legal interest of the owners, except in those very limited circumstances where there is sufficient evidence to establish that the equitable interest is different from the legal title.
In your case, while the title of the property remains in joint names, it is considered that you are the sole equitable owner by virtue of the Court order. Therefore, you are entitled to claim 100% of income and expenses for the property from the date of the Court order. However, prior to the Court order, the income and expenses must be shared according to the legal title.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
