Private ruling: CGT - beneficial ownership
Date of advice: 22 December 2021
Published: March 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will CGT event A1, or another CGT event, happen when title to the property is transferred? | A1: No. CGT event A1 happens when you dispose of a CGT asset. However, CGT event A1 does not occur if there is only a change of legal ownership and not a change of beneficial ownership. In this case, we accept the beneficial ownership is different to the legal ownership. It can reasonably be concluded that while you continued to be the legal owner of the property, that you passed beneficial ownership of the property to the purchaser following your agreement in 20XX and a CGT event happened at that time. Therefore, upon transfer of the legal title to the purchaser, there will not be a CGT event as they will retain beneficial ownership of the property.

Relevant facts and circumstances: You sold a property to a family member for market value in 20XX. The property had always been your main residence before the sale. The parties recorded the agreement between themselves in a one-page agreement. The parties neglected to transfer title to the property. Since the agreement made in 20XX, the property became the purchaser's main residence and the purchaser has paid for all outgoings, including rates and utilities, any maintenance fees and the cost of any improvements and/or renovations. Title to the property will now the be transferred to the purchaser.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20. | Income Tax Assessment Act 1997 section 104-10.