Private ruling: CGT - legal vs beneficial ownership
Date of advice: 25 August 2022
Published: November 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Were you the owners of the Property for CGT purposes at the time of disposal? | A1: No. Based on the facts, although you had a legal interest in the Property, you did not have a beneficial interest. You were therefore not the owners for CGT purposes at the time of disposal.

Relevant facts and circumstances: A property was purchased (the Property). The date of purchase was several years ago. The legal owners of the Property are Person A, Person B and Person C. Person A and Person B are the parents of Person C. On settlement, Person C moved into the Property and established it as their main residence. At the time, Person C was in a de-facto relationship. This relationship ended shortly after the Property was purchased. Person A and Person B were signatories to the contract to purchase the Property. The equity in Person A and Person B's property was used for the purpose of being guarantors to enable Person C to get funds to purchase the Property. At the time of purchase of the Property, Person A and Person B sought legal advice regarding their concerns with Person C's de-facto relationship. They were advised that the best course of action was to be included on the Property title. All correspondence related to the purchase of the Property was sent to Person C. Person C paid all loan repayments, insurance, utilities and general maintenance and upkeep relating to the Property. Person C got married last year and the Property has been sold. The Property was sold last year for $XXX. All correspondence and proceeds from the sale were directed solely to Person C. Person A and Person B have provided bank statements to show that they did not receive any of the capital proceeds into their bank account.

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