| 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: 1052289085272
Date of advice: 16 August 2024
Ruling
Subject: CGT - joint tenant conversion
Question 1
Will you have any Capital Gains Tax (CGT) consequences under Part 3-3 of the Income Tax Assessment Act 1997 (ITAA 1997) from the conversion of your joint tenancy interests in the two pre-CGT land titles to tenants in common interests?
Answer
No.
This ruling applies for the following periods:
Income tax year ending 30 June 2025
Income tax year ending 30 June 2026
The scheme commenced on:
1 July 2024
Relevant facts and circumstances
1. On XX November 19XX, two pre-CGT land titles were registered to three taxpayers as joint tenants.
2. The Land Title certificates have been provided by the taxpayer.
3. The tenants are changing their registered interests from joint tenants to tenants in common.
Relevant legislative provisions
Section 108-7 of the Income Tax Assessment Act 1997
Reasons for decision
Issue 1
Question 1
Summary
As the CGT regime operates in a way where you are deemed not to hold any different CGT asset, the conversion of your interest from joint tenant to tenants in common does not result in any CGT consequences including that your interests retain their pre CGT status.
Detailed reasoning
Section 108-7 of the ITAA 1997 specifically treats individuals who own a CGT asset as joint tenants as if they each owned a separate CGT asset constituted by an equal interest in the asset and as if each of them held that interest as a tenant in common.
The conversion of a joint tenancy to a tenancy in common, does not change what the CGT regime deems to be the CGT asset. Prior to the conversion, the interests are deemed to be tenant in common interests and following conversion they are at law tenant in common interests.
For this reason, the CGT regime does not operate in a way where there is ever considered to be any difference in the CGT asset held either before or after conversion. The consequence of this is that there is not any disposal or acquisition of any CGT asset meaning that your interests retain their pre CGT status.
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).
