| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. 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: 1012683227634
Ruling
Subject: Capital gains tax
Questions and answers
1. Can you include all of the capital gain made on the disposal of the investment which you co-owned with another person?
No.
2. Can you include your share of the capital gain made on the disposal of the investment which you co-owned with another person?
Yes.
This ruling applies for the following period:
Year ended 30 June 2014
The scheme commenced on:
1 July 2013
Relevant facts and circumstances
You co-owned an investment with another person.
You have now disposed of the investment.
The entire capital proceeds were paid into your bank account.
You wish to include the entire capital gain in your income tax return. The other person has agreed to this.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 6-10.
Reasons for decision
Subsection 6-10(2) of the Income Tax Assessment Act 1997 (ITAA 1997) states that amounts that are not ordinary income, but are included in your assessable income by provisions about assessable income, are called statutory income. Capital gains are a type of statutory income.
Subsection 6-10(3) of the ITAA 1997 states that if an amount would be statutory income apart from the fact that you have not received it, it becomes statutory income as soon as it is applied or dealt with, in any way on your behalf or as you direct.
In your case, you made a capital gain on the disposal of your share of an investment
You therefore must include the capital gains relating to your ownership interest of the investment. You cannot include another taxpayer's capital gain or other income in your own income tax return.
There is nothing in the law, however, that precludes you from giving money as a gift to another person in order for them to pay their tax liability however, as stated above, each taxpayer must put their income that legally is theirs on their own return.