Private ruling: Income tax - Capital gains tax - CGT assets - General
Date of advice: 23 May 2016
Published: July 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Does income from a rental property need to be reported in line with your ownership interest as per the title? | A1: Yes. | Q2: Does the capital gain/loss from the sale of a rental property need to be reported in line with your ownership interest as per the title? | A2: Yes

Relevant facts and circumstances: You purchased the property more than twelve months ago. The property was used to produce income. The title has remained solely in your name for the entire ownership period. The property was sold around eight years after purchase.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 104-10

Reasons for decision: Summary: The income and capital gain/loss from the rental property must be shared according to the legal interest of the owners except in those very limited circumstances where there is sufficient evidence to establish that the equitable interest is different from the legal title. In your case, you purchased the property solely in your name. You have held the property in your name for the entire ownership period. There are no circumstances to suggest that the equitable interest in the property differs from the interest on the title. Therefore, you are responsible to include the rental income according to you legal interest. Similarly, any capital gain or loss on disposal of the property will need to be declared in your tax return according to the legal interest in the property.