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Edited version of your written advice
Authorisation Number: 1012723868091
Date of advice: 12 November 2014
Ruling
Subject: Capital Gains
Question and Answer
When your property title is transferred in order to amend a land title record, will there be a CGT event?
Yes
Will the CGT event take place on the date when the effective transfer of ownership occurs?
Yes
This ruling applies for the following periods
Year ended 30 June 201X
Year ended 30 June 201X
Year ended 30 June 201X
The scheme commences on
1 July 201X
Relevant facts and circumstances
You purchased a property.
The title of the property lists you and another person as joint-tenants.
You found out that due to an administrative error, your lawyer did not transfer the property to as tenant-in-common (A/B%) as was intended.
The legal firm which originally processed the transfer of title are in the process of registering an adjustment with the Titles Office in order to reflect the correct ownership of the property as tenants-in-common (A/B%)
Relevant legislative provisions
Section 104-10(2) of the Income Tax Assessment Act 1997
Section 104-10(3) of the Income Tax Assessment Act 1997
Section 108-5 of the Income Tax Assessment Act 1997
Section 960-100 of the Income Tax Assessment Act
Reasons for decision
A taxpayer disposes of a CGT asset if a change of ownership occurs from the taxpayer to another entity, whether because of some act or event or by operation of law (section 104-10(2) of the Income Tax Assessment Act 1997).
Subsection 104-10(3) ITAA 1997 provides that CGT event A1 happens when you enter into the contract for the disposal or, if there is no contract, when the change of ownership occurs.
It was identified that the property which you purchased was registered as a joint tenant property with the Titles Office. You intended for the property to be 99% owned by you and 1% owned by the other party, when in fact the property was recorded as equal ownership. There will be a change of ownership to transfer the 49% level of ownership into your name. The capital gains effect will entirely depend on the effective date of transfer applied to the title by the Titles Office in order to effect when the transfer of ownership took place.