Private ruling: Rental property equitable interest
Published: January 2012
Ruling period: Year ended 30 June 2011 | Year ended 30 June 2012
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to income and expenses for your rental property in accordance with the intended split? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 6-5

Reasons for decision: Summary: Co-owners of rental property generally hold the property as joint tenants or tenants in common. The income and loss from a rental property must be shared in the proportion of ownership. Taxation Ruling TR 93/32 states that the net income or loss from a rental property must be shared according to the legal interest of the owners, except in those very limited circumstances where 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 land law legislation in the State or Territory in which the property is situated. The legal owner of the property is recorded on the title deeds for the property issued under that legislation. In your case, you have provided evidence that the equitable interest is different from the legal title and the error made in registering the title has now been corrected. Therefore, it is accepted that you are entitled to income and expenses for the property in line with the equitable interest, that is, 99% and 1%.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You and your spouse purchased a rental property in July 2010. | You completed a Buyer Information form stating that the property was to be held as tenants in common with 99% and 1% shares. | When your solicitor lodged the forms with the Titles Office, they completed the form as joint tenants. | The error was recently discovered and the solicitor has taken full responsibility and has now corrected the error with the Titles Office. | You have provided evidence of the Buyer Information form and a letter from your solicitor.