Edited version of private advice

Authorisation Number: 1052168779888

Date of advice: 27 September 2023

Ruling

Subject: Legal v beneficial ownership

Question

Will the interest income earned on monies deposited into a joint account from the sale of the Property be assessable income for Person B under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997).

Answer

No.

Having considered your circumstances and the relevant factors, we accept the beneficial ownership of the settlement monies to be different to the legal ownership of the joint bank account. The Commissioner is satisfied that Person A is the beneficial owner of the settlement monies deposited in the joint bank account during the relevant period. Therefore, the income generated from the settlement monies during the relevant period is assessable income for Person A. Consequently, the Commissioner is satisfied that Person B did not hold beneficial ownership in the source monies and therefore the income generated is not assessable income for Person B.

This ruling applies for the following period

Year ended 30 June 2023

The scheme commenced on:

1 July 2022

Relevant facts and circumstances

Person A and Person B hold a joint bank account.

In early 2023, the Property was sold and settlement monies were deposited into Person A and Person B's joint bank account.

Person A was the sole owner of the Property. Person B did not have legal or beneficial ownership of the Property.

Person A and Person B were advised that it was not necessary to open a bank account solely in Person A's name. They were advised that the interest earned on the joint bank account could be allocated solely to Person A at a later date.

The settlement monies, including the interest earned, have since been deposited into a bank account in Person B's name only.

Relevant legislative provision

Income Tax Assessment Act 1997 section 6-5