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10% of sale proceeds held on foreign resident's property sale

Discussion in 'Accounting & Tax' started by Greyghost, 9th Feb, 2016.

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  1. Greyghost

    Greyghost Well-Known Member

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    This is going to cause some ripples.
    Onus with be on purchaser to ask the right questions and or obtain a clearance certificate prior to settlement in order to wave the 10% withholding on purchase of anAustralian property from a non resident..

    I guess Conveyancers will just do this part and parcel of their existing role but we all know lawyers take a while to get their heads around things, took them 7 years to understand and write sale contracts with GST in them correctly.

    Foreign resident capital gains withholding payments | Australian Taxation Office
     
  2. Bullion Baron

    Bullion Baron Well-Known Member

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    Adelaide, Australia
    Seems a large majority of residential property sales would be excluded.
     
  3. Greyghost

    Greyghost Well-Known Member

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    Correct.
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    The process appears straight forward but in reality but may become somewhat complex:
    1. Solicitor / conveyancer will need information about the taxpayer ie TFN, date birth etc to process a clearance certificate
    2. The taxpayer may need to self-assess (using tax advice?) their estimated CGT liability if its zero or under 10%. Where this is less than the 10% (ie lets say its CGT exempt) they would need to process a variation and or apply the exemption in the certificate request.
    3. Payment etc
     
    Last edited: 10th Feb, 2016