Edited version of private advice

Authorisation Number: 1051935083776

Date of advice: 23 December 2021

Ruling

Subject: Legal vs beneficial ownership

Question

Do you need to declare a capital gain on the transfer of your interest in The Property to your child?

Answer

No. In your case, while you have a partial legal ownership in the Property, you were not the beneficial owner of The Property. Your child is the sole beneficial owner. Therefore, you will not have a CGT event when you transfer your legal interest to your child.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You purchased a property (The Property). You purchased the property in equal shares with your child.

Your child was unable to obtain finance for the property in their name alone.

Your child has always resided in the property since purchase. The property has never been used to earn assessable income.

You have never resided at the property and have always maintained your own main residence at another location.

Your child has paid all of the following:

•         purchase price of the property

•         all fees, interest and principal repayments in respect of any loans secured by any mortgages over the property

•         all outgoings, utility expenses, repairs, maintenance, land taxes and council rates.

You have transferred your share of The Property into your child's name.

You did not receive any consideration on transfer of The Property.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 102-20

Income Tax Assessment Act 1997 section 104-10