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Foreign resident CGT withholding

Published on 01 Jun 16 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

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.

Author profile

Jeffrey Chang CTA
Jeffrey is a Partner at Thomson Geer, where he advises on a wide range of taxation, structuring and superannuation issues with a focus on privately-held businesses and high wealth family groups. His is accredited by the Law Institute of Victoria as a taxation specialist. He has held a variety of committee roles with The Tax Institute and is presently a member of the Victorian State Council. Jeffrey is the author of numerous tax articles published in professional journals, and a regular presenter at The Tax Institute's seminars. - Current at 06 June 2016
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