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Edited version of private advice
Authorisation Number: 1052190412812
Date of advice: 08 November 2023
Ruling
Subject: Rental income
Question
Is the rental income required to be attributed to each co-owner according to their legal interest?
Answer
Yes.
Based on the information provided to the Commissioner each legal owner of the property must declare their share of the income in their own tax return in accordance with their legal ownership interest.
As you own a percentage of the property you are required to declare that percentage of the rental income in your tax return despite the will of your late spouse bequeathing 100% of the rental income to you.
The will does not grant you a life interest in the property and therefore there is no equitable interest in the property and the bequeathing of the rental income is a private arrangement between beneficiaries.
This ruling applies for the following period:
Year ended 30 June 2022
Year ended 30 June 2023
The scheme commenced on:
1 July 2021
Relevant facts and circumstances
You and your late spouse each owned a percentage of the property.
When your late spouse passed away, they bequeathed their share of the property to their children.
Your late spouse's share of the rental income is to be paid to you under their will until you pass.
The will states that it is not intended to create a life interest in any of the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5