FOREIGN RESIDENT CAPITAL GAINS - WITHHOLDING OBLIGATIONS BRIEF FOR REAL ESTATE &/ SETTLEMENT AGENTS- AFFECTS ALL REAL PROPERTY TRANSACTIONS $2 MILLION OR MORE INCLUDING AGGREGATED DEALS
Legislation will take effect as of July 1st 2016 requiring that ALL real property transactions over $2m be assessed to determine what (if any) Capital Gains Tax (CGT) liability exists.
There are many different scenarios which include multiple buyers or sellers and variations to the amount held.
In circumstances where there are multiple buyers (ie. A farmer has sold his farm off in separate lots) but the aggregated market value is over $2 million, the Seller will be required to provide a clearance certificate. If not each Buyer must withhold in proportion to their percentage of the total purchase price.
More information on this can be found on the ATO website at the following links:
https://www.ato.gov.au/…/js36800_Foreign%20residents%20fact… or https://goo.gl/TFkD3t
https://www.ato.gov.au/…/foreign-resident-capital-gains-wi…/ or https://goo.gl/1Y01VE
https://www.ato.gov.au/…/foreign-resident-capital-gains-wi…/ or https://goo.gl/GYzmuA
https://www.ato.gov.au/…/Foreign-resident-capital-gains-wi…/ or https://goo.gl/2GC9o2
https://www.ato.gov.au/…/Foreign-resident-capital-gains-wi…/ or https://goo.gl/EFtGIZ
IMPORTANT: Under no circumstances will Settlement Agents be permitted to nor required to complete or submit the Clearance Certificate Application. It is however, anticipated that Settlement Agents will need to advise their clients of where to access the Application and to whom their client must seek appropriate advice from.
Moving Forward (where to from here)
Soucre; AICWA email newsletter update 21/4/16
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