An analysis by Corrs Chambers Westgarth, Taxand Australia
The Australian Treasury has recently released a consultation paper proposing changes to Australia’s foreign resident capital gains tax (CGT) regime. Key points of the paper include:
Broadened Asset Definition: The definition of taxable Australian real property (TARP) will expand to include more assets like infrastructure and heavy machinery.
Extended Principal Asset Test (PAT): The PAT will now consider the value of TARP over a 365-day period, not just at a single point in time.
Increased Reporting: Foreign residents must notify the Australian Taxation Office (ATO) before selling shares or interests exceeding $20 million. The ATO could intervene in transactions if required.
Higher Withholding Rate: The CGT withholding rate for TARP sales will increase from 12.5% to 15%, with the $750,000 threshold removed.
