Private ruling: Capital gains tax - disposal
Date of advice: 25 February 2025
Published: 7 April 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: XX June 20XX

Ruling: Q1: Did capital gains tax event A1 happen to you when the Property was sold? | A1: No. Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997) states that a capital gain or capital loss is made only if a capital gains tax (CGT) event happens to a CGT asset, such as property. Under section 104-10 of the ITAA 1997, CGT event A1 happens if you dispose of a CGT asset. Subsection 104-10(2) states that you dispose of a CGT asset if a change of ownership occurs from you to another entity. Individuals who own a CGT asset as joint tenants are treated as if they each owned a separate CGT asset constituted by an equal interest in the asset and as if each of them held that interest as a tenant in common (section 108-7 of the ITAA 1997). When the Property was sold at Auction, you were the successful bidder. As you held a X% ownership interest in the property as a joint tenant, you did not dispose of that ownership interest when you acquired the Property at auction; you merely acquired another X% interest. As a change of ownership interest from you to another entity did not occur, you did not dispose of a CGT asset and CGT event A1 did not happen to you when the Property was sold at auction.

Relevant facts and circumstances: On X June 20XX you and your de-facto, acquired a property (The Property) for $X! as joint tenants. The Property was tenanted at the time of purchase so you could not move in. It remained tenanted for a few years, then you moved in and it became your main residence. Your relationship with your de-facto ended. On XX July 20XX a court order was issued by the Federal Circuit and Family Court of Australia under the Family Law Act 1975 (The orders). The Orders stipulated that the Property be sold and the proceeds from sale of the Property were to be paid in the following manner and priority: • To discharge the Home Loan • Payment of the agent's commission and advertising payable on the sale • Payment of the legal costs and outlays relating to the sale • That you receive the first $X! from the net sale proceeds, and • The balance of net sale proceeds after the payment to you, be paid to the parties equally. On XX January 20XX the Property went to public auction. You were the successful bidder at the auction. The Property was sold for $X! On XX April 20XX settlement occurred. A full stamp duty exemption was granted on the Property sale/transfer.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 subsection 104-10 (1) | Income Tax Assessment Act 1997 subsection 104-10 (2) | Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 section 108-7