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19 Nov 088 Foreign residents' attempts to avoid CGT - 2 Taxpayer Alerts

On 18 November 2008, the ATO issued the following 2 Taxpayer Alerts:

A staggered sell down arrangement attempts to progressively ‘sell-down’ an interest held by a foreign vendor through a series of transactions which are intended to avoid Australian capital gains tax.

This arrangement attempts to use selective valuations or injection of assets to change the calculation of assets held by a foreign vendor that may be subject to Australian capital gains tax.

In a media release issued on the same day, the Commissioner, Michael D’Ascenzo, announced the release of the two taxpayer alerts, which warn foreign residents selling indirect holdings in Australian real property about arrangements that attempt to avoid Australian CGT. The alerts cover arrangements that attempt to circumvent indirect holding rules through staggered sell down arrangements and manipulation of the value of assets.

“The Tax Office closely monitors disposals of real property by foreign residents using information from Australia and overseas agencies and has identified several suspect arrangements that attempt to avoid capital gains tax,” Mr D’Ascenzo said.

For a copy of the ATO media release, No 2008/57, 18 November 2008, go here.

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