Private ruling: CGT - legal v beneficial ownership
Date of advice: 19 May 2023
Published: 3 July 2023
Ruling period: Year ending 30 June 20YY
Date scheme commenced: XX Month 20YY

Ruling: Q1: Do you have a partial interest in the property for CGT purposes? | A1: Yes. Your ownership in the property was partial only. Based on the facts, the Commissioner accepts that although the title of the property was in your name only, you never had full beneficial ownership of the property. Therefore, your interest is only partial for CGT purposes.

Relevant facts and circumstances: Your parents wished to purchase a new property. Your stepparent, has an illness and your other parent, has ongoing medical concerns. Due to your stepparent's illness, they were unable to secure a bank loan. Your parents were capable of providing, and did provide, funds for two-thirds of the purchase price. You facilitated the property acquisition solely to assist your parents and took out a bank loan for approximately one third of the purchase price. The bank required the property title to be placed in your name only. You paid all loan repayments to the bank. Your parents used the property as their main residence for the whole period of ownership. You did not live there at any time. Your intention was that your parents would pay all costs associated with the property but from their point of view, you contributed roughly one third of the property acquisition costs therefore you should also pay one third of the property costs which you agreed to do. Your parents paid for all utilities and 66.6% of body corporate, council rates and property maintenance. You paid the remaining 33.3%. The property has since been sold. The proceeds were distributed at 67% to you parents and 33% to yourself.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 section 109-5