Private ruling: CGT - legal vs equitable ownership
Date of advice: 3 December 2025
Published: 27 January 2026
Ruling period: 30 June 20YY | 30 June 20YY
Date scheme commenced: DD MM YY

Ruling: Q1: Will the CGT event A1 occur for you when Person B disposes of their ownership interest in the property in state A | A1: Yes.

Relevant facts and circumstances: In 19YY you obtained an ownership interest in the property In State A (the property). You and Person B are listed on the property title with each of you holding an equal ownership interest as tenants in common. The purchase price of the property was $X. You have made the following statements regarding the purchase of the property: • You stated that you contributed $X of your own funds towards the purchase of the property; however, you have not provided any documentation to verify this. • You have also stated that you obtained a bank loan for $X which is the remainder of the purchase price. You have provided a quote from the bank which shows the value of the loan, however, this quote is a precontractual document and does not confirm the value of the loan, nor does it confirm that you obtained the loan in your own name. You have also provided a loan offer document which lists $X as the value of the loan. The loan offer document indicates the terms of the loan, however it does not confirm your acceptance of the offer. You have also provided a signed contract note for the purchase of the property. The note lists the purchasers as yourself and/or a nominee. A subsequent letter from your conveyancer also mentions the reference to a nominee on the contract note, and requests details on the purchasing arrangement of the property. You have not provided documents to confirm the value of, and parties to the home loan used to purchase the property. You have also made the following statements regarding the intention of the ownership structure and the treatment of the property after you purchased it: • You stated that at the time you purchased the property Person B obtained their ownership interest to prevent the property from being affected by a relationship breakdown. • You stated that you have solely reported all the rental income and expenses for the property since purchasing it. • You stated that you have paid for all expenses relating to the upkeep and maintenance of the property. • You stated that Person B has not contributed to any funds to maintain the property. You have not provided evidence to verify these statements.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 118-130 Further issues for you to consider | We have limited our private ruling to the questions raised in your application. There may be related issues that you should consider, including: | The reporting of rental income and deductions. TR 93/32 Income tax: rental property - division of net income or loss between co-owners (TR 93/32), is that there are extremely limited [emphasis added] circumstances where the legal and equitable interests are not the same, and that there is sufficient evidence to establish that the equitable interest is different from the legal title. As such, rental income and expenses are required to be apportioned in accordance with the property's ownership interests.

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 102-20 provides that you make a capital gain or loss as a result of a CGT event, event A1, occurring to a CGT asset in which you have an ownership interest. For this reason, it is important to establish who is the owner of a CGT asset at the time a CGT event occurs, although legal and beneficial ownership are generally identical, there are some situations this may differ | Detailed Reasoning - Legal and equitable ownership: The Commissioner's position, as stated in paragraphs 41 and 42 of TR 93/32 Income tax: rental property - division of net income or loss between co-owners (TR 93/32), is that there are extremely limited [emphasis added] circumstances where the legal and equitable interests are not the same, and that there is sufficient evidence to establish that the equitable interest is different from the legal title. Although TR 93/32 broadly deals with the division of rental income or loss between co-owners, it outlines the Commissioner's approach to considering whether legal and equitable ownership align. TR 93/32 states that capital gains or losses are divided on the same basis as net income or loss where there is a difference between legal and equitable ownership. As such, the Commissioner requires the same standard of evidence to establish that the beneficial ownership is different to the legal title in any relevant property dealings or transactions. A person's legal interest in a property is determined by the legal title to that property under the property law in the State or Territory in which the property is situated. Where it is asserted that the equitable ownership and legal ownership of a property are not the same, there must be evidence to show that the legal owner holds the property in trust for the beneficial owner. Relevant evidence includes contemporaneous information that evidences the intentions of the parties at the time the property was purchased or transferred from one legal owner to another, and evidence of contributions made by the parties towards the purchase price. | Detailed Reasoning - Express trust: An express trust is one intentionally created by the owner of property in order to confer a benefit upon another. It is created by express declaration, which can be affected by some agreement or common intention held by the parties to the trust. For an express trust to be created it is necessary that there is certainty of the intention to create a trust, subject matter and the object of the trust. While trusts can be created orally, all State Property Law Acts contain provisions that preclude the creation or transfer of interests in land except if evidenced in writing. | Detailed Reasoning - Resulting or implied trusts: On the purchase of real property, 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. A resulting trust arises by operation of law and falls into two broad categories. One such category is where someone purchases property in the name of another. As noted by Gibbs CJ, in Calverley v Green [1984] ( Calverley v Green ). 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. However, there are instances where this application may not apply, including: • where there is evidence of a specific intention to hold beneficial interest in the property for another person who contributed no amount, or a lesser amount, towards the purchase price. • where the presumption of advancement applies • where a court orders that property is held on trust (not relevant to your circumstances). | Detailed Reasoning - Presumption of advancement: The presumption of advancement is an equitable principle in which a person puts property in the name of another person with whom they have a close familial relationship. The presumption only applies to transfers and purchases made by people who stand in particular relationships, including parents from parents to their children. Under the presumption of advancement, the property is transferred with the intention of transferring both the beneficial interest in the property as well as the legal title. The parties hold their equitable interests in the property in the same proportions as their legal interests. Calverley v. Green outlines the following principles: • Where one person purchases property in the name of another, or in the name of himself and another jointly, it will be presumed that the first person did not intend the other to acquire a beneficial interest unless there is such a relationship between the persons as gives rise to a presumption of advancement. • The presumption of advancement may be rebutted by evidence of the actual intention of the purchaser at the time of purchase. If two persons have contributed to the purchase and the legal interest does not reflect the proportions of their contributions, the intentions of both parties at the time of purchase are important. • The onus of rebutting the presumption of advancement lies with the person who is considered as having gifted the property to another (usually the purchaser). Evidence is required that demonstrates that the purchaser did not intend the property to be a gift to the other party. In Australia, the case of in Bosanac v Commissioner of Taxation [2022] HCA 34 ( Bosanac ) sets precedent for the contemporary interpretation of the presumption in Australia. Their honours Kiefel CJ and Gleeson held that the principles underlying the presumption of advancement have continuing application, with an acknowledgement that the presumption may be seen as an absence of reason to presume that a [resulting] trust has arisen. Summarily, the principles contemplated in Bosanac confirm that where a husband or parent advances funds to purchase property in which the legal title is held in the name of the wife or child, it is presumed that the contribution of the advancer is intended to be for the benefit of the title holder. Furthermore, in the absence of evidence to the contrary, the presumption of advancement effectively rebuts the presumption of resulting trust, in which case the onus upon the advancer to provide evidence that a trust was in fact created in relation to their contribution to the purchase of the property. The decision in Koprivnjak v Koprivnjak [2023] NSWCA 2 ( Koprivnjak ) illustrates the application of the principles refined in Bosanac to the advancement of funds by a parent towards property in which legal title is held by their child. As well as confirming that the presumption of advancement will apply to rebut the presumption of resulting trust, Griffiths AJA expanded on the reasoning regarding the establishment of a resulting trust, stating that [the advancing party] carrie[s] the onus of satisfying the Court on the balance of probabilities that: • [the advancing party] advanced money to the purchase price and costs of the property for the purpose of a resulting trust (emphasis added); and • [the advancing party] and [the legal title holder] had the common intention that [the legal title holder] would hold the property on trust for [the advancing party]. | Detailed Reasoning - Application to your circumstances: In 19YY you purchased an investment property with Person B, each obtaining an equal ownership interest as tenants in common. You have not provided any substantive documentation to show that you solely contributed to the purchase price of the property as you did not retain any of the formal loan documents, (only a copy of a quote given to you by a bank and an offer document) or bank receipts or other documents. Furthermore, you did not have any form of written agreement/arrangement drawn up prior to or at the time of purchasing the property to show that Person B was to hold their share of the property on trust for you. With lack of evidence to the contrary and considering the statement you have made to indicate that Person B obtained an ownership interest in the property to prevent its sale, there is nothing to indicate anything other than that your deliberate intention was to purchase the property in equal shares, regardless of who made the contributions to the property's purchase price. While the case may be that the ownership interests held by you and Person B are different to the proportional contributions to the property's purchase price, which may give rise to the presumption of a resulting trust, we consider the presumption of a resulting trust is rebutted due to the intention of the parties, evident at the time of purchase through the decision for Person B to obtain his ownership interest in the property. We note that if there had been an absence of clear intention, the presumption of advancement would have applied to rebut the presumption of a resulting trust, such that the equitable ownership of the property would be equivalent to legal title. While Person B may not have benefited from any of the rental income and expenses from the property since it was purchased and may not receive any of the proceeds from the sale of the property, we consider that this choice to retain (or surrender) the sale proceeds is a private agreement and does not change the fact that your beneficial entitlement to the proceeds will be in equal proportions to your legal ownership interest.. As you have not provided the Commissioner with evidence to demonstrate that you held sole equitable ownership in the property, CGT event A1 under section 104-10 of the ITAA 1997 will occur for both the legal and equitable owners (you and Person B) when the property is sold. With both legal and equitable interests having been held by you and Person B at all times. Any capital gain or loss made on the sale of the property must be included in both owners' income tax returns in the relevant income year. As you have held your ownership interest in property for over 12 months, the CGT discount of 50% will apply which means that you pay tax on half of the net capital gain on that asset.