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Edited version of private advice
Authorisation Number: 1052134298149
Date of advice: 29 June 2023
Ruling
Subject: Capital gains tax - beneficial ownership
Question 1
Did a capital gains tax (CGT) event happen when you transferred your 50% legal interest in the property to your sibling?
Answer
No,CGT event A1 happens when you dispose of a CGT asset. The beneficial owner of the CGT asset will be liable to determine the capital gain (or loss) from the event. In this case we consider that the beneficial owner of the property is different to legal title. We accept that you are not the beneficial owner of the property given you did not contribute financially to the purchase price or ongoing costs in relation to the property. Therefore, a CGT event did not occur when you transferred the legal title to your sibling.
This private ruling applies for the following period:
Period ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The property was purchased over 10 years ago. You and your sibling each held a 50% legal interest in the property.
You did not make any contribution to the purchase costs.
Initially your sibling intended to purchase the property on their own however to secure finance your sibling needed you to be a co-borrower.
At the time of purchase you had a separate principal place of residence and the property was intended to be your sibling's principal place of residence.
The loan was obtained in both you and your siblings names with the equity in your principal place of residence used as security for the loan.
Your sibling sold a car to pay the deposit. Your sibling also paid stamp duty and legal costs.
You have not made any contributions to loan repayments, rates or maintenance for the property.
Recently you transferred your 50% interest in the property to your sibling.
You did not receive any money as a result of the transfer.
The property is not an investment property.
Relevant legislative provisions
Income Tax Assessment Act 1997 102-20
Income Tax Assessment Act 1997 104-10