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Edited version of your private ruling
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Subject: Capital gains tax - Real property
Question:
Does a capital gains tax (CGT) event occur when you acquire the interest in land owned by your child?
Answer:
Yes.
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You acquired property as tenants in common
The property consists of a house which was your main residence after 20 September 1985 until sometime later when the property was tenanted.
The property also has an external building which is attached to the main house
You have provided a document which forms part of, and should be read in conjunction with, this private ruling:
§ Copy of certificate of title.
The following information has been obtained from this document
§ There is only one title to the property
The property is held as tenants in common in a number of shares.
You will acquire 3 shares of the other tenant in common.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Subsection 104-10(4)
Income Tax Assessment Act 1997 Section 108-5
Income Tax Assessment Act 1997 Section 109-5
Reasons for decision
If there is a rearrangement of interests in the property this will cause a change of ownership to occur. When a change of ownership occurs, a disposal takes place, which means that CGT event A1 occurs under section 104-10 of the ITAA 1997 and 109-5 ITAA.
In your situation, the other tenant in common will dispose of 3 shares in the property to you. As a result of this you will not be liable for any CGT as a disposal CGT event has not occurred.