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Topics on CGT and GST for property buyers (4)  

Written by Ideas Group | Feb 17, 2021 11:25:09 PM

 

Exclusions from Foreign Resident CGT Withholding Requirements

When it comes to foreign resident capital gains tax (CGT) withholding, there are situations where no withholding is needed, as per the Australian Taxation Office (ATO):

  1. Acquisition by a deceased estate, beneficiary, or surviving joint tenant: If you're acquiring an asset after someone's death, there's no withholding.
  2. Acquisition under the Family Law Act or related laws: Assets acquired due to marriage breakdowns or similar situations are exempt.
  3. Acquisition from an income tax-exempt entity: If the seller is tax-exempt, no withholding is required.

Refer to ATO's legislative instruments for detailed information.

Here's a crucial point: For Taxable Australian Real Property (TARP), the law treats acquisitions as if they're from foreign residents, triggering CGT withholding. However, if the seller has an ATO clearance certificate or meets other exemptions, withholding may not apply.

On the other hand, for some assets like certain indirect Australian real property interests, buyers generally don't need to withhold unless they have reason to believe the seller's declaration of Australian residency is false.

If you need more information, you can reach Tax Ideas Accountants & Advisers 

at +61 2 83181545 or book an appointment.
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