Private ruling: CGT - legal vs beneficial ownership
Date of advice: 28 September 2022
Published: December 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 2020

Ruling: Q1: Did a CGT event happen to you on the disposal of the dwelling? | A1: No. CGT event A1 occurs when there is a disposal of an ownership interest in a CGT asset. However, CGT event A1 does not occur if there is only a change of legal ownership and not a change of beneficial ownership. Based on the facts, the Commissioner accepts that in your circumstances, although you were included on the title of the dwelling, it was never intended for you to have, and you never had, any beneficial ownership of the dwelling and it can be reasonably concluded that at the time ownership transferred, that is, when the dwelling was sold, you did not dispose of a beneficial ownership interest. Consequently, a CGT event did not happen to you when the dwelling was sold.

Relevant facts and circumstances: The dwelling was purchased in 20XX. You acted as guarantor of the mortgage for your child, so they were able to acquire the loan. A condition of you acting as guarantor for the mortgage was your name also being included on the title of the dwelling. There was never any intention for you to live in the dwelling and you never resided in it. You did not contribute to the deposit or provide financial assistance. You did not repay any of the mortgage. You did not pay any of maintenance costs for the dwelling. The dwelling was sold in 20XX and you did not receive any of the capital proceeds.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104-10