Private ruling: CGT - Absolute Entitlement
Date of advice: 14 December 2018
Published: April 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 01 July 2018

Ruling: Q1: Are you assessable on any part of the capital gain made on the sale of the main residence of your child? | A1: No. Having considered your circumstances and the relevant factors relating to your situation the Commissioner accepts that your interest in the property was held on bare trust for your child and that they were absolutely entitled to the property. Consequently the entire property is treated as having been your child’s asset for capital gains tax purposes. Further information can be found by searching TR 2004/D25 on ato.gov.au

Relevant facts and circumstances: Your adult child wished to purchase a property. Your child advised that they wished to purchase the property and could only get a loan for the purchase of the house if your name was included on the Title Deeds. You agreed to include your name on the Title Deeds. Your child was totally responsible for the selection of the property, negotiations on the price paid and for all costs associated with ownership of the property. For the whole of the ownership period your child and their family used the property as their main residence. The property was later sold and you have not gained in any material way from the sale. All proceeds of the sale were applied to the clearance of the mortgage and the purchase of a replacement property to be used as the main residence of your child and their family.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 106-50