| 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: 1052176995998
Date of advice: 23 October 2023
Ruling
Subject: Beneficial ownership
Question
Will Capital Gains Tax (CGT) event A1 happen to you on the sale of the property as per section 104-10 of the Income Tax Assessment Act 1997?
Answer
No. You dispose of a CGT asset if a change of ownership occurs from you to another entity, whether because of some act or event or by operation of law. However, a change of ownership does not occur if you stop being the legal owner of the asset but continue to be its beneficial owner.
Having considered your circumstances and the relevant factors relating to your situation, the Commissioner accepts that although you had a legal ownership interest in the property, you did not have any beneficial ownership of the property.
Therefore, CGT event A1 did not happen when your legal ownership ended, which in your case was when the original administration error was amended by transfer of title to the correct owner for nil consideration.
This ruling applies for the following period:
Year ended DD MM 20YY
The scheme commenced on:
DD MM 20YY
Relevant facts and circumstances
In 2017, Person A made enquiries as to a property advertised for sale, located at XXX.
The block had 2 Units situated on it, registered on strata plan number XXX, under folio X and folio XX.
Unit X was registered under volume XXX folio X, and Unit XX under volume XXX folio XX.
Person A, along with Person B and Person C made an offer on Unit XX, that was accepted, and a contract of sale was dated DD MM 20YY, with settlement occurring a few weeks later.
On DD MM 20YY, the registered title for the unit, under volume XXX, folio XX, was transferred to Person A, Person B and Person C.
During 20YY, the owner of the other unit on the block advised they had been made aware that, the two units had been registered to the incorrect folio numbers originally.
On DD MM 20YY, the title under volume XXX folio XX, was transferred from Person A, Person B and Person C to the owner of Unit X.
The original administration error was amended by transfer of title to correct owner for nil consideration.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10