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An analysis by Corrs Chambers Westgarth, Taxand Australia
The Australian Government said its draft legislation for changes to the foreign resident capital gain tax (CGT) regime clarifies the original rules’ intent. Our Australian member firm, Corrs Chambers Westgarth, argues that it broadens scenarios where foreign investors face CGT in Australia, increasing sovereign risk as a destination for foreign capital.
Key proposed changes include recapturing historical exit transactions as far back as 2006, no grandfathering for pre-existing asset exits, expanding treaty meanings to align with the Taxable Australian Real Property (TARP) concept, and indirect sales testing becoming more challenging with the introduction of a 365-day principal asset test.
Luke Imbriano and Simon Clark from Corrs Chambers Westgarth, Taxand Australia, have published a more detailed analysis of the implications of the draft legislation, which you can read in full here.
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