Private ruling: Capital gains tax
Published: August 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Questions and answers | 1. Can you include all of the capital gain made on the disposal of the investment which you co-owned with another person? | No. | 2. Can you include your share of the capital gain made on the disposal of the investment which you co-owned with another person? | Yes.

Relevant facts and circumstances: You co-owned an investment with another person. You have now disposed of the investment. The entire capital proceeds were paid into your bank account. You wish to include the entire capital gain in your income tax return. The other person has agreed to this.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-10.

Reasons for decision: Summary: Subsection 6-10(2) of the Income Tax Assessment Act 1997 (ITAA 1997) states that amounts that are not ordinary income, but are included in your assessable income by provisions about assessable income, are called statutory income. Capital gains are a type of statutory income. Subsection 6-10(3) of the ITAA 1997 states that if an amount would be statutory income apart from the fact that you have not received it, it becomes statutory income as soon as it is applied or dealt with, in any way on your behalf or as you direct. In your case, you made a capital gain on the disposal of your share of an investment You therefore must include the capital gains relating to your ownership interest of the investment. You cannot include another taxpayer's capital gain or other income in your own income tax return. There is nothing in the law, however, that precludes you from giving money as a gift to another person in order for them to pay their tax liability however, as stated above, each taxpayer must put their income that legally is theirs on their own return.