Private ruling: CGT event - beneficial ownership
Date of advice: 25 July 2022
Published: November 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will a capital gains tax event occur to you on the disposal of the Property XXXX? | A1: No. A 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 circumstance, although your name was included on the title of the property, you never had, nor were intended to have, beneficial ownership of the property. It can be reasonably concluded that at time of change of ownership, that is, when the property was sold, you did not dispose of any beneficial ownership interest. Therefore, a CGT event A1 did not occur to you when the property was sold. It is also considered that no other CGT event happened to you.

Relevant facts and circumstances: Your parent, Person A, used your name to purchase a residential property (dwelling). Person A sold the dwelling in mid-20XX which required your signature. Person A used your name to prevent the dwelling being sold or mortgaged by their spouse at that time. You had purchased your own dwelling in mid-19XX which was your main residence. You never resided in the dwelling. You have never had any other dealings with the dwelling or paid for any expenses. You did not receive any of the capital proceeds from the sale of the dwelling. Person A used the capital proceeds from the sale of the dwelling to purchase another dwelling that is their main residence. You provided a statutory declaration from Person A that states they used your name to stop the dwelling being mortgaged by their partner and that they are the beneficial owner of the property. You have acknowledged that you understand why Person A used your name to purchase the dwelling and you have resolved this with them.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10