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Edited version of your written advice
Authorisation Number: 1051262762971
Date of advice: 02 August 2017
Ruling
Subject: Capital gains tax
Question 1
Will the transfer of legal title of the property from yourself to the beneficial owner result in a capital gains tax event?
Answer
No
A change in the legal ownership of an asset without a change in the beneficial ownership will not constitute a disposal for capital gains tax purposes (subsection 104-10(2) of the Income Tax Assessment Act 1997).
You are the legal owner of the property (your name is on the title deed), however you are not the beneficial owner (further information on the definition of a beneficial owner can be found in Taxation Ruling IT 2486 and Taxation Determination TD 92/106). The beneficial owner is your child. When you transfer title of the property from your name to your child’s name there are no capital gains tax consequences.
This ruling applies for the following period:
Year ended 30 June 2018
The scheme commences on:
1 July 2017
Relevant facts and circumstances
Your name was transferred to the title deed of the property owned by your child, for security purposes following a relationship breakdown.
No money was transferred from you to your child; you had no financial interest in the property.
You have not paid for the mortgage or invested in the property.
You will transfer legal title from your name to your child’s name.
Relevant legislative provisions
Subsection 104-10(2) of the Income Tax Assessment Act 1997
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