Private ruling: Rental property expenses
Published: November 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for any expenses relating to investment properties held by your spouse? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 6-5

Reasons for decision: Summary: The income and loss from a rental property must be shared in the proportion of ownership. Taxation Ruling TR 93/32 states that the net income or loss from a 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. A person's legal interest in a property is determined by the legal title to that property under the land law legislation in the State or Territory in which the property is situated. The legal owner of the property is recorded on the title deeds for the property issued under that legislation. In your case, your spouse's name is on the legal title of the properties which means that your spouse is the legal owner. As such, only your spouse is entitled to the net income or loss from them. Therefore, you are not entitled to claim any expenses relating to the properties.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: Your spouse owns two investment properties. | Your spouse does not earn assessable income. | Loans for the properties are in joint names with your spouse.