Private ruling: Capital gains tax
Date of advice: 7 June 2023
Published: 31 July 2023
Ruling period: Year ending 30 June 2024
Date scheme commenced: 1 July 2023

Ruling: Q1: Did a CGT event happen to you on the disposal of the dwelling? | A1: No. CGT event A1 occurs when there is a disposal of an ownership interest in 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 included on the title of the dwelling, it was never intended for you to have, and you never had, any beneficial ownership of the dwelling and it can be reasonably concluded that at the time ownership will be transferred, you will not dispose of a beneficial ownership interest. Consequently, a CGT event will not happen to you when your name is removed from the title deed.

Relevant facts and circumstances: You and your spouse were put on the title when your child purchased a home. You initially were going to be guarantors on the loan for your child. Your child had a third party mortgage brokering for them and a few days out from settlement you were told you needed to be on the title as co-owners. You had to use your main residence as security. You consented in writing immediately. Settlement took place in the following month. You have not put any money toward any of the costs associated with the property. Your child has paid the mortgage and all expenses on the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-5