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Edited version of private advice
Authorisation Number: 1051833576476
Date of advice: 5 May 2021
Ruling
Subject: Rental income - ownership interest - legal interest
Question
Is the rental income derived from a property you hold a legal interest in (as a trustee) assessable to you as an individual?
Answer
No. As you do not hold a legal or equitable interest in the property as an individual, any rental income or rental loss that arises from the property will not be included in your assessable income. Further information on trustees can be found by searching QC 23084 on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 2020
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You and your sibling are executors and trustees of the deceased's estate.
The deceased owned a property located at XXXX (the property).
The property was transferred to you and your sibling in your capacity as trustees for the estate. The legal title of the property is held as joint tenants.
The deceased's will stated that the executors hold the estate on trust for the deceased's wife and to set aside out of the estate a "fund" to consist of specific items, which included the property owned by the deceased. The will further stated that if the property was rented that all rental proceeds are to be paid to the deceased's wife.
The property is currently used for rental purposes. In accordance with the will all the rental income is paid to the deceased's wife. You do not receive any rental income.
You have been declaring the rental income according to your legal ownership interest on the property title.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 118-130
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