Private ruling: Investment account - legal vs equitable ownership - reporting
Date of advice: 26 August 2025
Published: 27 October 2025
Ruling period: 30 June 20XX to period ending 30 June 20XX
Date scheme commenced: DD MM YY

Ruling: Q1: Will you and Person B, have capital gains tax (CGT) event A1 happen to each of you for 50% of the shares purchased using jointly owned funds when you dispose of shares held in the share investment trading account in your name? | A1: Yes On the purchase of the shares, 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. 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. The investment company would not allow you to open the account in joint names, therefore you opened an account in your name to invest in shares. You have provided evidence showing that you purchased the shares using funds from jointly owned bank accounts. The Commissioner's view, illustrated in TD 2017/11, is that in the absence of evidence to the contrary we consider that both joint owners have a 50% equitable interest in the contents of the joint account. Therefore, we consider that Person B has contributed 50% of the funds to purchase the shares, and a 'resulting trust' has arisen in the investment accounts whereby you holds 50% of the shares purchased using joint funds on trust for Person B. As you each hold a 50% equitable ownership interest in each of the investment accounts, you are each required to report 50% of the capital gains and losses for your equitable ownership interest in each account.

Relevant facts and circumstances: In 20XX, you and person B decided to start investing When you opened the investment accounts, you could only open the account in one name and not joint names. You opened a couple of accounts in your name Between DD MM YY and DD MM YY you deposited an amount in account 1. Between DD MM YY and DD MM YY you deposited an amount in account 2. You have stated that you intended to use one of the accounts for long term investments and the other with a more flexible investment approach. All the monies used to purchase shares was taken from jointly owned bank accounts: You did not earn any income from the investment in the 20XX financial year In 20XX the investment company changed its name, however your account numbers did not change at this time. You has been reporting all the investment income, Interest and dividends in their tax returns.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 104-10