Private ruling: CGT - beneficial interest
Date of advice: 22 May 2026
Published: 3 August 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Did Capital Gains Tax (CGT) event A1 occur for you when you disposed of your ownership interest in the Property. | A1: Yes.

Relevant facts and circumstances: At some time after 1985, you and your parent, emigrated to Australia. In 19XX, you, your sibling, and your parent purchased the Property and each held 1/3 equal shares in the Property as tenants in common. You provided a bank book and advised the entries reflect your parent's contribution towards the purchase price of the Property. You provided a copy of a letter from the bank addressed to all 3 owners of the Property. The letter confirmed settlement of the Property, on XX XX 19XX. The letter detailed the source of the purchase funds. You have advised that you purchased the Property in the 3 names, because at the time you and your sibling were single and intended to reside in the dwelling for the foreseeable future. Your intention was to continue residing in the Property, after you were married, to continue to care for your parent in their older age. However, you did vacate the Property. You stated that around the time of purchase, the intention was that when your parent passed away you and your sibling would inherit their share equally. In 19XX, the loan was repaid. In 19XX, you bought a house as your primary residence, and moved out of the Property. Your parent lived alone at the Property from this point on. The Property was solely used for residential purposes and you never rented nor leveraged the property for profit. In 20XX, your parent's health started to deteriorate. In 20XX, your parent moved to a residential care home. The accommodation bond was split unequally between your parent and the rest of the family. In 20XX, the Property was sold. Your parent remained on the title at time of sale. You advised that the proceeds were split unequally between the 3 owners. Your parent repaid you and your sibling the cost of the residential care home accommodation bond out of their share of the proceeds. Income Tax Assessment Act 1997 section 104-10 Income Tax Assessment Act 1997 subsection 104-10(2) Income Tax Assessment Act 1997 Division 115 Income Tax Assessment Act 1997 Part 3-1 Income Tax Assessment Act 1997 Part 3-3


Reasons for decision: Summary: Capital Gains Tax (CGT) event A1 happened to you when you disposed of your ownership interest in the Property. | Detailed Reasoning - Capital Gains Tax: Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a capital gain or capital loss results from a CGT event occurring. The most common CGT event, event A1, occurs under section 104-10 of the ITAA 1997 when there is a change in ownership of a CGT asset. Subsection 104-10(2) of the ITAA 1997 provides that a disposal of a CGT asset does not occur if there is only a change of legal ownership and no change of beneficial ownership. We recognise that you can be a legal owner of a property but have no beneficial ownership. In these circumstances, it is the individual who has beneficial ownership of a property who is subject to a CGT event upon sale or transfer of title. | Detailed Reasoning - Legal and beneficial ownership: Taxation Ruling TR 93/32 Income tax: rental property - division of net income or loss between co-owners broadly deals with the division of rental income or loss between co-owners. It also outlines our approach to considering differences between legal and beneficial ownership. Paragraph 41 of TR 93/32 provides there are extremely limited [emphasis added] circumstances where the legal and beneficial interests are not the same and that there is sufficient evidence to establish that the beneficial interest is different from the legal title. Paragraph 42 of TR 93/32 provides that capital gains or losses are divided on the same basis as net income or loss where there is a difference between legal and beneficial ownership. Your legal interest in a property is determined by the legal title to that property under the property law legislation in the State or Territory in which the property is situated. In some cases, it is possible for legal ownership to differ from beneficial ownership. You may hold a legal ownership interest in a property for another individual on trust. As such, we require the same standard of evidence to establish that the beneficial ownership is different to the legal title in any relevant property dealings or transactions. This evidence ordinarily includes: • contemporaneous documentation that clearly shows the parties' intentions at the time the property was purchased, and • documentation that clearly shows that the parties treated the property in accordance with those intentions during the ownership period. Gibbs CJ in Muschinski v. Dodds [1985] HCA 78 ( Muschinski ) explained the relevance of contemporaneous evidence required to establish a trust over property between 2 parties: Where both transferees have contributed to the purchase money, the intentions of both are material, but where only one has provided the money it is his or her intention alone that has to be ascertained. The evidence admissible to establish the intention of the real purchaser will comprise 'the acts and declarations of the parties before or at the time of the purchase... or so immediately thereafter as to constitute a part of the transaction' ( Charles Marshall Pty. Ltd. v.Grimsley [1956] HCA 28; (1956) 95 CLR 353, at p 365). Further, as stated by Gordan and Edelman JJ in Bosanac v Commissioner of Taxation (2022) 275 CLR 37 ( Bosanac ) at [113]: ... The objective intention of the parties is determined at the time when the trust was purportedly created - here, when the property in issue was purchased. Apart from admissions against interest, the only evidence relevant and admissible as to the parties' objective intention is their acts and declarations before or at the time of the transaction or "so immediately [thereafter] as to constitute a part of the transaction". Subsequent events and conduct are otherwise not admissible. Where it is asserted that the beneficial 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 demonstrates 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. 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 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. Resulting trusts On the purchase of real property, a resulting trust may arise 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 Calverley v Green 56 ALR 483 ( Calverley) . A trust is presumed in favour of the party providing the purchase money. As stated in Calverley by Gibbs CJ: Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained. In the present case however both purchasers contributed the purchase money. The amount... was provided equally by the parties, for it was lent to them jointly, on terms which made them jointly and severally liable for its repayment, and, having thus been borrowed, was applied by them in part payment of the purchase price. Mason and Brennan JJ further expanded on the purchase price later in Calverley saying: The purchase price is what is paid in order to acquire the property; the mortgage instalments are paid to the lender from whom the money to pay some or all of the purchase price is borrowed. In this case, the [money] was borrowed from the mortgagee by the plaintiff and defendant jointly... Thus the plaintiff and defendant both contributed to the purchase price of the... property. If a resulting trust arises, and you hold the legal title, you are presumed to hold the property upon resulting trust in favour of those who contributed to its purchase cost. 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 other's name. The presumption of a resulting trust can be rebutted by evidence of the parties' intentions at the time of purchase as considered by Gageler J in Bosanac at [64]: The presumption of a resulting trust is a presumption of fact, functionally akin to a civil onus of proof. The presumption will yield to an actual intention to the contrary found on the balance of probabilities as an inference drawn from the totality of the evidence. The weight to be given to the fact of a contribution having been made to the purchase price in drawing an inference as to actual intention will vary according to the totality of the circumstances of the case. Presumption of advancement In certain relationships it is presumed that conferring legal title on another is intended to be a gift. This is called presumption of advancement. Relationships that have traditionally attracted the presumption of advancement include transfers from husband to wife, and from parent to child. The presumption does not apply to a transfer from wife to husband or between de facto spouses. The presumption may be rebutted by evidence of the contributing party's intention not to benefit from the benefiting party at the time of the property purchase. Where a presumption of advancement applies, it rebuts the presumption of a resulting trust proportionate to the purchase cost contributions, such that legal and beneficial interests are the same. | Detailed Reasoning - Changing main residences: Section 118-140 of the ITAA 1997 provides if you acquire a new home before you dispose of your old one, you can treat both as your main residence for up to 6 months. You can do this if all of the following are true: • you lived in your old home as your main residence for a continuous period of at least 3 months in the • 12 months before you disposed of it • you didn't use your old home to produce income (such as rent) in any part of those 12 months when it wasn't your main residence • the new property becomes your main residence. | Detailed Reasoning - Partial main residence exemption: Section 118-185 of the ITAA 1997 provides you get only a partial main residence exemption where the property was not your main residence for the whole time you owned it. You calculate the part of the capital gain that is taxable as follows: total capital gain made from the CGT event x number of days in your ownership period when the dwelling was not your main residence (non-main residence days) total number of days in your ownership period | Detailed Reasoning - Application to your circumstances: The Commissioner has no general discretion within the CGT provisions to reduce or exempt CGT that applies by operation of law. The fact the Property has been used solely for residential purposes, and not used to derive rental income, doesn't impact the application of the CGT provisions. The Commissioner's starting point is that legal and beneficial interests are the same unless there is sufficient evidence to demonstrate that the beneficial interest varies from the legal interest. In your case, the evidence you have provided from the time of purchase demonstrates that you contributed to the purchase of the Property by being a co-borrower on the loan and you made a cash contribution. As such, you owned a 1/3 share in the Property as evidenced on the legal title. Therefore, we consider that your legal and beneficial interests are the same unless you can establish that beneficial interest is different from the legal title. We are guided by the common law principles to consider actions and evidence from before, at the time, and immediately after the purchase in accordance with the authorities in Muschinski and Bosanac . The loan documents describe you as a co-borrower on the loan. As in Calverley , you were a co-borrower jointly responsible for the loan repayments along with your parent and your sibling and had equal rights to the Property and funds. Although you have provided documents with notations, you have not presented evidence to support these funds came from where you stated in the notations. Despite the insufficient evidence, we consider that even if you did not contribute cash amounts, you did contribute to the purchase price by being co-borrower on the loan. In your case, you have not demonstrated your beneficial interest is different to your legal interest. It was a joint decision to be registered on the title with each person holding a 1/3 ownership interest. It was also decided that upon your parent's death the Property would go to you and your sibling. There is no ambiguity regarding the arrangement, you all contributed to the purchase price, all registered as owners of the Property, and you intended to reside in the Property for the foreseeable future. There is no evidence to support you considered a trust arrangement. The deliberate decisions you all made do not indicate that you held your ownership interest in the Property on trust for your parent. Although, if we did consider a resulting trust (your parent contributed more to the purchase price than you and your sibling), the presumption of advancement applies to ensure your legal and beneficial ownership are the same. Therefore, CGT event A1 happened to you when you disposed of your ownership interest in the Property . You can treat both the Property and your house in XXX as your main residence for up to 6 months. You are also eligible for a partial CGT exemption on the sale of the Property. You calculate your exemption using the formula above. Your non-main residence days are the number of days from the time you moved out of the Property until settlement of the sale of the Property, less 6 months (changing residences). You may be entitled to a 50% CGT discount under section Division 115 of the ITAA 1997 as you held your share of the Property longer than 12 months, provided you meet the relevant criteria.