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Edited version of private advice
Authorisation Number: 1052065562814
Date of advice: 20 March 2023
Ruling
Subject: CGT - beneficial ownership
Question
Will you have a CGT liability on the sale of the property?
Answer
No, you did not become the beneficial owner of the property when you became the legal owner, and therefore the CGT liability will remain with the beneficial owner as per section 104-10(2) of the Income Tax Assessment Act 1997.
This ruling applies for the following period:
30 June 20XX
The scheme commences on:
1 July 19XX
Relevant facts and circumstances
• Your sibling and their spouse purchased land and built a dwelling on it before 20 September 1985
• They lived and raised their children in the property and continued to live in the property after the children moved out. Your sibling has continued to live in the property until the current date and the property is and has always been used as their principal place of residence.
• They have met all necessary outgoings associated with the property since they purchased the property.
• You loaned your sibling a sum to assist in starting their own business.
• On or around the time the loan was in place, the property was transferred to you, for reasons unknown to you.
• The State Revenue Office (SRO) issued land tax assessments to you in or around that time, you and your sibling attended the SRO for a meeting to clarify why this had happened and that your sibling was the owner of the property and it was their main residence. The SRO asked you to put this in writing so they could consider it further. Due to the complexity of the issue and your uncertainty of the consequences at the time you never put anything in writing, and you continued to pay land tax.
• Your sibling has long since repaid you the loan in full.
• The loan to your sibling was never intended to result in you having beneficial ownership of the property.
• You always intended that the beneficial ownership of the property remains with your sibling.
• The proceeds of the sale of the property will go to your sibling as beneficial owner.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10