Private ruling: CGT - disposal (legal v beneficial ownership)
Date of advice: 1 July 2022
Published: October 2022
Ruling period: Year ended 30 June 2022
Date scheme commenced: 1 July 2021

Ruling: Q1: Did CGT event A1, or another CGT event, happen to you when the property was sold? | A1: No. CGT event A1 occurs when there is an ownership of a CGT asset. However, CGT event A1 does not occur if there is only a change of legal ownership and not a change of beneficial ownership. Based on the facts, the Commissioner accepts that in your circumstances, although you were a legal owner of the property, it was never intended for you to have any beneficial ownership of the property and it can be reasonably concluded that at time of change of legal ownership of the property, when the property was sold, that no change of beneficial ownership occurred. You did not have a CGT event A1 or any other CGT event occur when the property was sold.

Relevant facts and circumstances: Your parent purchased the property in accordance with the terms of a will. On purchase of the property, your parent elected to transfer the property into your name subject to their rights. Your parent has used the property for their principal place of residence solely to the exclusion of all other parties. Your parent paid stamp duty for the transfer of the property and has been responsible for and paid all rates, costs, fees and charges in connection with the upkeep and maintenance of the property. You did not pay any money for the transfer of ownership into your name. Your parent has undertaken, and fully paid for, renovations to multiple rooms of the property. Your parent has now sold the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20. | Income Tax Assessment Act 1997 section 104-10.