| Disclaimer 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: 1051985111229
Date of advice: 1 June 2022
Ruling
Subject: CGT - disposal of a dwelling - beneficial ownership
Question
Did a capital gains tax (CGT) event happen to you on the sale of the property?
Answer
No.
CGT event A1 occurs when there is a disposal of an ownership interest in a CGT asset. However, CGT event A1 does not occur if there is only a change of legal ownership for you and not a change of beneficial ownership.
Based on the facts, the Commissioner accepts that in your circumstances, although your name was included on the title of the property, it was never intended for you to have, and you never had, any beneficial ownership of the property and it can be reasonably concluded that at time of change of ownership, that is, when the property was sold, you did not dispose of any beneficial ownership interest. Consequently, you did not have a CGT event A1 when the property was sold. It is also considered that no other CGT event happened to you.
This ruling applies for the following period:
The income year ended 30 June YYYY
The scheme commences on:
1 July YYYY
Relevant facts and circumstances
Your adult child purchased the property in YYYY.
The bank's approval of your child's mortgage for the purchase of the property was conditional upon you:
• being named as joint tenant on the property title with your child,
• being joint borrower on the mortgage with your child, and
• guaranteeing the mortgage.
You agreed to the bank's conditions listed above and as such you were a joint tenant on the property title and were also joint borrower and guarantor of the mortgage.
All property-related costs, including the mortgage, were paid by your child.
You had no financial input in the purchase, maintenance, upkeep, or any other costs related to the property.
Your child lived in the property as their primary residence.
You never lived in the property.
The property was sold in YYYY.
The proceeds from sale of the property were retained by your child.
You did not receive any funds from the sale of the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 102-20
Income Tax Assessment Act 1997 section 104-10