Private ruling: CGT - Disposal - Legal vs Equitable
Date of advice: 25 November 2025
Published: 12 January 2026
Ruling period: 30 June 20XX
Date scheme commenced: DDMMYY

Ruling: Q1: Will a CGT event A1 occur for you when the property purchased in 20XX located at Suburb A (the Property) is disposed of? | A1: No.

Relevant facts and circumstances: On DDMMYY, you and Person B purchased an investment property located at Suburb A (the Property). A loan was taken out for this property in both your names. The loan taken out covered all the incidentals like stamp duty, borrowing expenses etc. The Property settlement occurred DDMMYY; the settlement letter solely addressed to Person B. The Property title was placed under Person B as being the sole owner. You stated that The Property was placed under Person B's name to ensure that no matter what happened, they would always have a place of their own. You on the advice of a tax agent you have been claiming an equal share of the rental property income since around 20XX. You continuously contribute to the upkeep of the property, by paying for fixing up the property from your individual payments. All loan repayments come out of a joint bank account held in both yours and Person B's name with you contributing all of your pay into this account due to Person B's income being significantly less than your own.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 118-130

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that you make a capital gain or loss as a result of a CGT event occurring to a CGT asset in which you have an ownership interest. For this reason, it is important to establish who is the owner of a CGT asset at the time a CGT event occurs. | Detailed Reasoning - Legal and equitable ownership: The ATO considers that there are extremely limited circumstances where the legal and equitable interests are not the same and that there is sufficient evidence to establish that the equitable interest is different from the legal title. A person's legal interest in a property is determined by the legal title to that property under the property law in the State or Territory in which the property is situated. Where it is asserted that the equitable ownership and legal ownership of a property are not the same, there must be evidence to show that the legal owner holds the property in trust for the beneficial owner. Relevant evidence includes contemporaneous information that evidences the intentions of the parties at the time the property was purchased or transferred from one legal owner to another, and evidence of contributions made by the parties towards the purchase price. Taxation Ruling TR 93/32 Income tax: rental property - division of net income or loss between co-owners (TR 93/32) contains guidance on the issues involved where the equitable interest in a property may not follow the legal title. As stated in TR 93/32 paragraphs 38 to 41, it has been said that if the equitable interest does not follow the legal title, there is some basis for the profit/loss to be distributed on the equitable and not the legal basis. We will assume where taxpayers are related, e.g., husband and wife, that the equitable right is exactly the same as the legal title. | Detailed Reasoning - Express trust: An express trust is one intentionally created by the owner of property in order to confer a benefit upon another. It is created by express declaration, which can be affected by some agreement or common intention held by the parties to the trust. For an express trust to be created it is necessary that there is certainty of the intention to create a trust, subject matter and the object of the trust. While trusts can be created orally, all State Property Law Acts contain provisions that preclude the creation or transfer of interests in land except if evidenced in writing. | Detailed Reasoning - Resulting or implied trusts: On the purchase of real property, a resulting trust may be presumed where the legal title that vests in one or more of the parties does not reflect the respective contributions of the parties to the purchase price. A resulting trust arises by operation of law and falls into two broad categories. One such category is where someone purchases property in the name of another. As noted by Gibbs CJ, in Calverley v Green [1984] HCA 81 :(Calverley v Green case). A trust is presumed in favour of the party providing the purchase money. If an individual purchases and then pays for a property, but legal title is transferred to another person at their direction, the presumption of a resulting trust arises - the property is held in trust for them. The law presumes that the purchaser, as the person providing consideration for the purchase intended to retain the beneficial interest, although the legal interest is in the others name. However, there are instances where this application may not apply, including: • where there is evidence of a specific intention to hold beneficial interest in the property for another person who contributed no amount, or a lesser amount, towards the purchase price. • where the presumption of advancement applies • where a court orders that property is held on trust (not relevant to your circumstances). | Detailed Reasoning - Presumption of advancement: The presumption of advancement is an equitable principle in which a person puts property in the name of another person with whom they have a close familial relationship. The presumption only applies to transfers and purchases made by people who stand in particular relationships, including parents from parents to their children. Under the presumption of advancement, the property is transferred with the intention of transferring both the beneficial interest in the property as well as the legal title. The parties hold their equitable interests in the property in the same proportions as their legal interests. Calverley v. Green outlines the following principles: • Where one person purchases property in the name of another, or in the name of himself and another jointly, it will be presumed that the first person did not intend the other to acquire a beneficial interest unless there is such a relationship between the persons as gives rise to a presumption of advancement. • The presumption of advancement may be rebutted by evidence of the actual intention of the purchaser at the time of purchase. If two persons have contributed to the purchase and the legal interest does not reflect the proportions of their contributions, the intentions of both parties at the time of purchase are important. • The onus of rebutting the presumption of advancement lies with the person who is considered as having gifted the property to another (usually the purchaser). Evidence is required that demonstrates that the purchaser did not intend the property to be a gift to the other party. In Australia, the case of in Bosanac v Commissioner of Taxation [2022] HCA 34 ( Bosanac ) sets precedent for the contemporary interpretation of the presumption in Australia. Their honours Kiefel CJ and Gleeson held that the principles underlying the presumption of advancement have continuing application, with an acknowledgement that the presumption may be seen as an absence of reason to presume that a [resulting] trust has arisen. Summarily, the principles contemplated in Bosanac confirm that where a husband or parent advances funds to purchase property in which the legal title is held in the name of the wife or child, it is presumed that the contribution of the advancer is intended to be for the benefit of the title holder. Furthermore, in the absence of evidence to the contrary, the presumption of advancement effectively rebuts the presumption of resulting trust, in which case the onus upon the advancer to provide evidence that a trust was in fact created in relation to their contribution to the purchase of the property. The decision in Koprivnjak v Koprivnjak [2023] NSWCA 2 ( Koprivnjak ) illustrates the application of the principles refined in Bosanac to the advancement of funds by a parent towards property in which legal title is held by their child. As well as confirming that the presumption of advancement will apply to rebut the presumption of resulting trust, Griffiths AJA expanded on the reasoning regarding the establishment of a resulting trust, stating that "[the advancing party] carrie[s] the onus of satisfying the Court on the balance of probabilities that: • [the advancing party] advanced money to the purchase price and costs of the property for the purpose of a resulting trust (emphasis added); and • [the advancing party] and [the legal title holder] had the common intention that [the legal title holder] would hold the property on trust for [the advancing party]. | Detailed Reasoning - Application to your circumstances: When determining legal v beneficial ownership, our starting point, as noted in TR 93/32, is that the beneficial ownership of the Property is the same as the legal ownership. The onus then lies with the taxpayer to rebut this conclusion through evidence to the contrary. In your circumstances, the Property was placed solely under Person B's name. Therefore, under TR 93/32 it is considered that Person B held 100% legal and beneficial interest in the Property. You stated that you made the decision to place the Property solely under Person B's name to ensure that no matter what happened, Person B would always have a place of their own. This was a deliberate decision to ensure you provided for Person B irrespective as to what may occur in the future. You did not advance that the Property was held on trust for you, however, in reviewing the evidence you have provided, we consider there to be insufficient evidence you intended the Property to be held on trust for you. We consider that if the presumption of a resulting trust arose for contributions to the purchase price from the loan to which you were a co-borrower, the presumption of advancement would apply to displace the presumption of a resulting trust. As such, the component of the purchase price contributed by you would have been held to be advanced for your spouse's benefit and the equitable interest would remain in accordance with the legal title, as affirmed by the decision in Bosanac v Commissioner of Taxation (2022) 275 CLR 37. Therefore, as you have not demonstrated to the Commissioner that the Property was held on trust for you or that the presumption of advancement would be displaced, a CGT event A1 will not occur for you. Any capital gain or loss made from the sale of the property will not be reported by you.