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Edited version of private advice
Authorisation Number: 1051835774130
Date of advice: 17 June 2021
Ruling
Subject: Beneficial ownership
Question
Are you the beneficial owner of the overseas rental properties?
Answer
No. Having considered your circumstances and the relevant factors it is accepted that in this instance you are not the beneficial owner of the overseas properties. It follows therefore that your parent was the beneficial owner of the properties and that upon their death, beneficial ownership passed to their estate which has the obligation to declare any income from the rental properties and can claim a foreign tax offset for any relevant taxes paid overseas.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Several years ago, you entered into an agreement along with your parent to purchase multiple overseas properties, and the related car parking slots.
Both you and your parent were Australian residents at the time you entered into the agreement.
You were not a resident of Country Z.
The entire cost of acquisition was paid by your parent and you were added to the title in order to help your parent administer the properties.
You did not make any payment towards the purchase of the properties.
After taking possession of the properties, your parent rented out the premises and the rental income from the properties was declared solely in your parent's overseas income tax return.
You parent passed away and you were appointed the Executor of their Will.
Your parent's Will bequeathed the properties to their children in equal measure.
In order to facilitate the sale of the properties, your siblings executed release deeds in regard to their share, rights, title and interest of the properties.
As executor you entered into separate contracts for the sale of each of the properties.
The sale of the property resulted in a capital loss.
The proceeds of the sale were transferred to your sibling's respective bank accounts in accordance with your parent's Will.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-130
Income Tax Assessment Act 1997 section 128-50