Private ruling: CGT - deceased estate
Date of advice: 10 November 2022
Published: 16 January 2023
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does any capital gains arise when you transfer full legal title of a property to your sibling's spouse? | A1: No. The Commissioner is satisfied that based on the information provided that a capital gains tax event relevant to you did not occur, as you were not the beneficial owner of the property. It is possible for legal ownership to differ from beneficial ownership. Where beneficial ownership and legal ownership of an asset are not the same, there must be evidence that the legal owner holds the property on trust for the beneficial owner. The Commissioner is satisfied that you do not have a beneficial ownership in the property.

Relevant facts and circumstances: Your sibling bought a property several decades ago. Your sibling paid a deposit and borrowed the remainder from a bank. The deposit was your sibling's savings. Your sibling required a guarantor for the loan because of your sibling's low wages and you agreed to act as guarantor. As a condition of the loan, the bank required that both you and your sibling be registered on the title. You and your sibling were registered as joint tenants on the title deed. Your sibling lived in the property as their main residence from the time it was purchased. You sibling married their spouse several years later and the spouse has lived there since then. The couple's child was born a couple of years after they married, and the child also resides at the property. Your sibling and spouse met all of the outgoings in respect of the property including the loan repayments. There is currently a remaining balance outstanding on the loan. You have not paid anything in respect of the property. Your sibling died intestate a number of months ago. Upon your sibling's death you became entitled to the whole legal estate of the property by the common law right of survivorship. You are planning to transfer the property to your sibling spouse.

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