Private ruling: Legal vs beneficial ownership
Date of advice: 5 February 2024
Published: 18 March 2024
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will a capital gains tax (CGT) event occur in relation to your legal interest in the property upon its sale? | A1: No. Although you have retained a legal ownership interest in the property, you abandoned any beneficial interest when you vacated the property. As you have no beneficial interest in the property, no CGT event will occur in relation to the transfer of legal title from your name upon its sale. Therefore, no capital gain or loss will be assessable to you.

Relevant facts and circumstances: You and another party (Party B) purchased a property as joint tenants. You did not make any financial contribution to the purchase of the Property. You moved into the Property and treated it as your main residence from the time you purchased it. You vacated the property after a short duration and abandoned any ongoing ownership interest in the property. Considerable difficulties prevented you from transferring legal title of the property when you vacated it. The property is to be sold. You will not receive the benefit of any of the capital gain from the sale of the property.

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