Private ruling: CGT - legal vs beneficial ownership
Date of advice: 14 September 2023
Published: 24 October 2023
Ruling period: Period ending 30 June 2024
Date scheme commenced: 1 July 2023

Ruling: Q1: Did you have a CGT event A1 arising from the transfer of title of the property? | A1: The Commissioner accepts that although the property was purchased in both your father's and your names, your father held the beneficial ownership interest in the property from the date of purchase. Therefore, you had no beneficial ownership of the property are not liable to pay CGT upon the transfer of the property title to your father.

Relevant facts and circumstances: Your entered into a private loan agreement to assist with the purchase of a residential property for your father. Your father has limited English, does not read or write in English, and was not in a position to apply for finance for the purchase of the property on his own. The loan agreement confirms that you held your fifty percent ownership interest in the property as trustee for your father, XXXX. The agreement states that your fifty percent interest in the property would be transferred to your father once the loan was repaid in full and your father was in a financial position to refinance the property in his sole name. The agreement also states that you have no beneficial ownership in the property and are only named on title for the purposes of the loan application as trustee for your father. In XX 20XX you and your father acquired the property at XX XX XX as joint owners. Your father was solely responsible for all mortgage repayments and all other costs in relation to the property. You did not contribute to the purchase and have not contributed to any loan repayments or property costs. The property was never used to produce income and remained the main residence of your father. You also resided at the property from XX 20XX until XX 20XX until you moved to your own home with your spouse. Once your father retired and was able to access his superannuation to refinance the property to his sole ownership. The transfer of your fifty percent ownership interest to your father was effected on XX XX 20XX.

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