| Disclaimer 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 private advice
Authorisation Number: 1052002331091
Date of advice: 28 July 2022
Ruling
Subject: CGT - legal vs beneficial ownership
Question
Will the sale of The Property result in a capital gains tax (CGT) event for you?
Answer
No. Having considered your circumstances and the relevant factors relating to your situation, the Commissioner accepts that although you were the legal owner of the property, it was never intended for you to have any beneficial ownership of the property. Therefore, you will not have a CGT event A1 or any other CGT event occurring when your legal ownership ends.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You and xxxx were in a de facto relationship for approximately XX years. You had two children during this period but decided to end the relationship amicably.
At the end of the relationship, you and Ex-De facto determined that you no longer wished to live together and Ex-De facto purchased his own property at the Property.
As Ex-De facto was unable to obtain a mortgage in his name only, on the advice of your Mortgage Broker, Ex-De facto applied for the Property in both of your names as this increased his borrowing capacity.
You and Ex-De facto were unaware that this could potentially have capital gains tax ramifications in the future.
Ex-De facto purchased and moved to the Property and you remained at xxxx.
Although the Property was now legally owned by both yourself and Ex-De facto, neither of you intended for you to benefit from the Property.
Ex-De facto was the only one who contributed financially to the Properties mortgage. The Property was used by Ex-De facto for the entire time of ownership and was not rented at any time.
When the Property was sold in 20XX Ex-De facto used the proceeds to purchase his new home which he was able to purchase, solely in his name.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 102-20
Income Tax Assessment Act 1997 section 104-10
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).
