Private ruling: CGT - disposal of asset
Date of advice: 24 April 2026
Published: 13 July 2026
Ruling period: 30 June 20XX
Date scheme commenced: DD MM YY

Ruling: Q1: Did a CGT event A1 occur when you transferred your interest in the property to a family member ? | A1: Yes.

Relevant facts and circumstances: Around MM 20YY Person B and Person C purchased the property as joint tenants with an equal ownership interest. Settlement took place on DD MM 20YY. The property has always been Person B's main residence. In 20YY Persons B & C separated. Person B was unable to take out a loan solely at the time due to being self-employed and not able to meet the banks repayment level for the value of the loan required. In 20YY to help Person C retain the property, You and Person B applied for a home loan of $XXX to payout the existing mortgage in the amount of $XXX held by Persons B & C and the amount of $XXX as part of a financial agreement entered into by the family law courts on DD MM 20YY. There were no Court documents recorded as the agreement between Persons B & C was a mutual agreement. You did not provide evidence of this agreement. While the loan was taken out in all 3 parties names it was decided that Person B as owner/occupier would hold a X% ownership interest and you X% ownership interest each as tenant in common. A Deed of Agreement was entered into in 20YY between you and Person B at the time of applying for the home loan to pay the existing mortgage. The Deed of Agreement sets out (amongst other things): • That Person B must not, without your written consent, sell, transfer or provide any person or legal entity any mortgage, lien, or any other interest in the property. • The appointing of you as Power of Attorney in the event of a breach of the Deed or in the circumstance of any overdue payment of the loan to the bank. This power of attorney allows you to: ­ Do everything necessary or desirable under the terms of the loan in your sole discretion to undertake the sale or transfer of the property, ­ Exercise any rights, including the right to discharge the mortgage over the property, or ­ Do any other act or thing in respect of the property. o The Deed provides that Person B declares that all acts and things done by yourself in exercising your powers under the power of attorney to be good and valid as if they were done by Person B themself. o Provides you a right to security via upon settlement of the loan, you would register a caveat on the title of the property to protect your interests in accordance with the Deed. o That upon death of either parties, any rights under the Deed are enforceable via either a party's legal personal representative or Estate for the recovery of debt incurred by Person B. o The failure of a party to perform any provision of the Deed does not affect how a party may enforce the full right of that provision in the future. Person B has paid for all the property incidentals such as loan repayments, council rates, maintenance etc. In MM 20YY Person B was able to obtain a home loan and you then transferred your ownership interest in the property to Person B.

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 118-130

Reasons for decision: Summary: The property was purchased in 20YY by Person B (Family member of yours) and their ex-spouse Person C. In 20YY Persons B & C separated. As Person B was self-employed and could not satisfy the banks repayments requirements and to help Person B keep the property you applied for home loan with Person B to pay out the existing mortgage on the property, as well as pay out the binding financial agreement amount of $XXX to Person C. You chose to each hold a 15% ownership interest in the property giving Person B a X% ownership interest as tenants in common. Person B resides in the property as their main residence and contributes to all the expenses of the property, however, there is no written evidence showing that the property was purchased beneficially for Person B. The Deed of Agreement dated 20YY evidences you held beneficial ownership via your ability to prevent the sale of the property, sell or transfer the property where the requirements of the Deed were not adhered to, and enforce your rights under the Deed through your legal personal representative. | Detailed Reasoning - Detailed reasoning: Section 102-20 provides that you make a capital gain or loss as a result of a CGT event, event A1, occurring to a CGT asset in which you have an ownership interest. For this reason, it is important to establish who is the owner of a CGT asset at the time a CGT event occurs, although legal and beneficial ownership are generally identical, there are some situations this may differ. | Detailed Reasoning - Legal and equitable ownership: The Commissioner's position, as stated in paragraphs 41 and 42 of TR 93/32 Income tax: rental property - division of net income or loss between co-owners (TR 93/32), is that there are extremely limited [emphasis added] circumstances where the legal and equitable interests are not the same, and that there is sufficient evidence to establish that the equitable interest is different from the legal title. Although TR 93/32 broadly deals with the division of rental income or loss between co-owners, it outlines the Commissioner's approach to considering whether legal and equitable ownership align. TR 93/32 states that capital gains or losses are divided on the same basis as net income or loss where there is a difference between legal and equitable ownership. As such, the Commissioner requires the same standard of evidence to establish that the beneficial ownership is different to the legal title in any relevant property dealings or transactions. A person's legal interest in a property is determined by the legal title to that property under the property law in the State or Territory in which the property is situated. Where it is asserted that the equitable ownership and legal ownership of a property are not the same, there must be evidence to show that the legal owner holds the property in trust for the beneficial owner. Relevant evidence includes contemporaneous information that evidences the intentions of the parties at the time the property was purchased or transferred from one legal owner to another, and evidence of contributions made by the parties towards the purchase price. | Detailed Reasoning - Express trust: An express trust is one intentionally created by the owner of property in order to confer a benefit upon another. It is created by express declaration, which can be affected by some agreement or common intention held by the parties to the trust. For an express trust to be created it is necessary that there is certainty of the intention to create a trust, subject matter and the object of the trust. While trusts can be created orally, all State Property Law Acts contain provisions that preclude the creation or transfer of interests in land except if evidenced in writing. The concept of a bare trust was discussed by Gummow J in Herdegen & Anor v FC of T 88 ATC 4995; (1988) 84 ALR 271 (Herdegen). The usually accepted meaning of 'bare' trust is a trust under which the trustee or trustees hold property without any interest therein, other than that existing by reason of the office and the legal title as trustee, and without any duty or further duty to perform, except to convey it upon demand to the beneficiary or beneficiaries or as directed by them. | Detailed Reasoning - Resulting or implied trusts: On the purchase of real property, a resulting trust may be presumed where the legal title that vests in one or more of the parties does not reflect the respective contributions of the parties to the purchase price. A resulting trust arises by operation of law and falls into two broad categories. One such category is where someone purchases property in the name of another. As noted by Gibbs CJ, in Calverley v Green [1984] (Calverley v Green). A trust is presumed in favour of the party providing the purchase money. If an individual purchases and then pays for a property, but legal title is transferred to another person at their direction, the presumption of a resulting trust arises - the property is held in trust for them. The law presumes that the purchaser, as the person providing consideration for the purchase intended to retain the beneficial interest, although the legal interest is in the others name. However, there are instances where this application may not apply, including: Where there is evidence of a specific intention to hold beneficial interest in the property for another person who contributed no amount, or a lesser amount, towards the purchase price. Where the presumption of advancement applies. Where a court orders that property is held on trust (not relevant to your circumstances). | Detailed Reasoning - Presumption of advancement: The presumption of advancement is an equitable principle in which a person puts property in the name of another person with whom they have a close familial relationship. The presumption only applies to transfers and purchases made by people who stand in particular relationships, including parents from parents to their children. Under the presumption of advancement, the property is transferred with the intention of transferring both the beneficial interest in the property as well as the legal title. The parties hold their equitable interests in the property in the same proportions as their legal interests. Calverley v. Green outlines the following principles: Where one person purchases property in the name of another, or in the name of himself and another jointly, it will be presumed that the first person did not intend the other to acquire a beneficial interest unless there is such a relationship between the persons as gives rise to a presumption of advancement. The presumption of advancement may be rebutted by evidence of the actual intention of the purchaser at the time of purchase. If two persons have contributed to the purchase and the legal interest does not reflect the proportions of their contributions, the intentions of both parties at the time of purchase are important. The onus of rebutting the presumption of advancement lies with the person who is considered as having gifted the property to another (usually the purchaser). Evidence is required that demonstrates that the purchaser did not intend the property to be a gift to the other party. In Australia, the case of in Bosanac v Commissioner of Taxation [2022] HCA 34 (Bosanac) sets precedent for the contemporary interpretation of the presumption in Australia. Their honours Kiefel CJ and Gleeson held that the principles underlying the presumption of advancement have continuing application, with an acknowledgement that the presumption may be seen as an absence of reason to presume that a [resulting] trust has arisen. Summarily, the principles contemplated in Bosanac confirm that where a husband or parent advances funds to purchase property in which the legal title is held in the name of the wife or child, it is presumed that the contribution of the advancer is intended to be for the benefit of the title holder. Furthermore, in the absence of evidence to the contrary, the presumption of advancement effectively rebuts the presumption of resulting trust, in which case the onus upon the advancer to provide evidence that a trust was in fact created in relation to their contribution to the purchase of the property. The decision in Koprivnjak v Koprivnjak [2023] NSWCA 2 (Koprivnjak) illustrates the application of the principles refined in Bosanac to the advancement of funds by a parent towards property in which legal title is held by their child. As well as confirming that the presumption of advancement will apply to rebut the presumption of resulting trust, Griffiths AJA expanded on the reasoning regarding the establishment of a resulting trust, stating that "[the advancing party] carrie[s] the onus of satisfying the Court on the balance of probabilities that: • [the advancing party] advanced money to the purchase price and costs of the property for the purpose of a resulting trust (emphasis added); and • [the advancing party] and [the legal title holder] had the common intention that [the legal title holder] would hold the property on trust for [the advancing party]. | Detailed Reasoning - Application to your circumstances: When determining legal whether legal ownership and beneficial ownership of an asset are different, our starting point, as noted in TR 93/32 is that the beneficial ownership of the Property is the same as the legal ownership. The onus then lies with the taxpayer to rebut this conclusion through evidence to the contrary. In your circumstances, you assisted Person B by purchasing the Property as co-borrowers and joint proprietors. You were all listed on the Property title, and it is presumed that your legal and beneficial interests are the same. When you transferred your interest in the Property to Person B, CGT event A1 occurred unless you can demonstrate that you held the Property on trust for Person B, that is, you had no intention to hold beneficial interest. The Commissioner must determine your objective intentions by reviewing the evidence at, or so immediately thereafter, as to constitute part of the transaction. This requires the Commissioner to perform a fact-finding search on the evidence available to him. This evidence, however, is not limited to the time of the transaction where the admissions made are against the [advancing] parties interests. The documentation you have provided to support that the property was purchased for Person B are inconclusive. There is no evidence of an intention at the time of purchase, that Person B would be the sole beneficial owner of the property that would sufficiently demonstrate an express trust. The Deed does not show that you were holding your ownership interests in the property on trust for Person B rather the contrary in that you held beneficial interest through control on how the property could be managed and prohibited Person B from undertaking actions without your express written consent. In accordance with the concepts discussed in Herdegen, it cannot be accepted therefor that you held the property on bare trust for Person B as the Deed goes beyond simply holding the property on legal title. There is also no evidence of a resulting trust, while the Deed states that Person B is to make all the repayments of the loan and to pay for all the expenses of the property, the repayments of a loan are not contributions to the purchase price. There is no evidence that Person B contributed to the purchase price via the loan or otherwise. Therefore, you have not satisfied the Commissioner that the legal and beneficial ownerships differ and a CGT event A1 occurred when you transferred your interest in the Property to Person B. As the property was held for over 12 months, there is a CGT discount of 50%, which means that you pay tax on half of the net capital gain on that asset.