Private ruling: Capital gains tax - beneficial ownership
Date of advice: 15 October 2019
Published: December 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the sale of the property result in a capital gains event for you? | A1: No. Having considered your circumstances and the relevant factors relating to your situation the Commissioner accepts that although you were the legal owner of the property, you held no beneficial interest in the property and your relative was absolutely entitled to the property. Therefore, sale of the property will not result in a CGT event for you in relation to the disposal of the property.

Relevant facts and circumstances: Due to personal circumstances your relative was unable to finance the purchase of a property on their own and requested financial assistance from you and your late spouse. You and your spouse gifted your relative a sum of money to purchase a property to be used as their main residence. On the contract of sale for the purchase of the property both you and your spouse along with your relative were inadvertently listed as joint purchasers and were listed as owners of the property on the Certificate of Title, although this was never the intention. This was done in error. Your relative and their family moved into the property and lived there until it was sold several years later. Your relative made improvements to the property and paid for all purchase and sale costs as well as upkeep and maintenance during the time they resided there. You did not contribute to any of these costs. Your spouse's name was removed from the title when they passed away, however your name remained on the title until it was sold. You have not benefited from the property and did not receive any proceeds from the sale.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 106-50 | Income Tax Assessment Act 1997 Section 108-5