Capital Gains Tax (CGT) 2016

Foreign resident CGT withholding

Source: Taxation In Australia Journal Article

Published Date: 1 Jun 2016


For contracts made from 1 July 2016, the new CGT withholding regime will require a purchaser of high-value Australian land from a non-resident vendor to withhold and pay up to 10% of the purchase price to the Commissioner. The new withholding rules can potentially apply regardless of the vendor's tax residency status. Deeming provisions are in place to captur e acquisitions fr om residents unless an ATO-issued clearance certificate is obtained.

The regime is not limited to purchases and can apply to transactions for which there is no cash consideration, such as gifts, matrimonial property settlements, deceased estate distributions and in-specie trust distributions. Without appropriate action, the regime has the potential to operate as a de facto gift or death duty on high-value transfers of land without cash consideration. This article examines the operation of the new rules.

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Capital Gains Tax (CGT) 2016

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