Private ruling: : CGT - legal v beneficial ownership
Date of advice: 3 August 2023
Published: 18 September 2023
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will a CGT event occur for you when the legal title to the Property is transferred? | A1: No. Having considered your circumstances and the relevant factors relating to your situation, the Commissioner accepts that although you are a legal owner of the Property, you ceased to have any beneficial ownership in the Property in the year 20XX. The Commissioner accepts that the Property was your main residence from acquisition to the date when you no longer held beneficial ownership in the Property. Consequently, a CGT event occurred for you in the year 20XX. However, any capital gain or loss made from your disposal of your ownership interest in the Property in the year 20XX is disregarded because it was your main residence up to the time of the CGT event. This means another CGT event will not occur for you when the legal title of the Property is transferred

Relevant facts and circumstances: The Property was purchased in 20XX and is less than 2 hectares in size. The registered owners of the Property are you, Person A and Person B. You hold one-third legal interest in the Property. You are a co-borrower on the loan obtained to purchase the Property. You did not directly contribute to the deposit. You do not hold an ownership interest in any other Property. Once acquired, you resided at the Property as your main residence. Between 20XX and 20XX, you paid the household expenses and Person A made the loan repayments. You and Person A separated in mid-20XX. You signed a X State Transfer as transferor on or around DD MM 20XX. You understood that you would be removed from the legal title upon signing the Transfer. You received no monies for signing the Transfer. You and Person A divorced in MM 20XX. Person A has remained living at the Property. The Property has never been used to derive assessable income. You have not made any contributions to any expenses associated with the Property or the loan since 20XX. Person A has now requested to transfer the title into his name 'by way of gift'. He will pay transfer costs. You will receive no monies when your name is removed from the legal title. Your name will also be removed from the loan obtained to purchase the Property.

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