Capital Gains Tax exemption for Primary Residence - non-residents changes

Thats not always the case. A person can also be non-resident in all jurisdictions (or even classified as resident in more than one) if that what the taxing laws prescribe. A common example is a US citizen who moves to Sydney and resides here for the foreseeable future. So then the DTA is referred for each type of income. On the reverse an HK resident with AU investment income subject to AU withholding may only pay that as a final tax since HK doesnt seek to tax some forms of worldwide income. And the most common concern in the US case falls to how super is taxed since US taxing laws see super funds as a trust and seek to tax in a aggressive manner v's our system which is highly concession and compulsory. The DTA has zero alignment on this issue. Generally the DTA can affect how taxes to property applies rather than if tax applies. eg non resident rates, withholding etc.

Most people think DTA allow one country to tax and the others wont. Generally that is not the case

DTA are a part of tax law but they are not themselves a taxing law. I'm quite familiar with the concept.

 

This bill is now down to number 38 on the Senate notice paper. 11 sitting days left this year.

 

Someone needs to get working on the likes of the inbox for Derryn Hinch or Bob Katter or Palmers former mate who went to the UAP so they see that the bills harms aussies citizens. Throw in example of a former serving soldier moving overseas to chase work forced to sell their house after they depart....???

 

Already done that - personally wrote to all the senators and the local member explaining the impact to me. I know of other expats who have done the same plus there are organizations who have also done this. There are at least two email petitions that I know of. Hats off to the Australian Chamber of Commerce in Hong Kong, they flew two representatives to Australia that met with then Treasurer Scott Morrison and Federal Financial Services Minister Kelly O’Dwyer specifically to discuss this issue - pictures of the meetings are on their twitter feed.
I would encourage any property owner to also add their voice to this: you may have no plans to spend some time abroad at this stage, but you don't know what opportunities may come up in the future. The same goes for Accountants and Lawyers - they should be adding their voices, saying look at the negative consequences to our clients. Some have already, but more are needed. Don't just email, follow it up with a phone call, you can also send via snail mail or fax. An email alone is easily ignored, it needs to be followed up. Contact details can be found on the aph.gov.au web site.

 

The Accounting Bodies have also made professional representations asking for the rules to be toned down. They are quite strong at lobbying such matters.

I cant help but feel the bill was pulled back destined to die in the chambers and avoid being seen as withdrawn. According to its prior readings it a "given" to receive final approval so why hasnt it ? Cause its bad law. I question if it could be constitutionally challenged and thats why its say there since Feb. Its one of those pieces of bad legislation that rarely gets this far. It good law for some but its impact on former tax residents and people who have lived a long life in the country has an abrupt impact that is not consistent with "fair" laws.

 

For those watching this thread I can see that the substantially REDUCED sessions of Parliament (now just two weeks ) and the reduced (none!!) majority for the Lib-Nats means its becoming far less likely this law may even get approval before the election due in May 2019. Their implosion may help some expats.

‘A surrender from this government’ admits that they have effectively parked tax changes.

 

Thanks for the update Paul. It's now number 25 on the notice paper - and 4 sitting days left this year. I just wish this would end, so expats like myself know where we stand. Not only are we personally affected by this non-government, Australian expats have to deal with constant negative comments about our home country. Climate change denial, treatment of refugees, unstable government, why are you knocking down an Olympic stadium that's only 18 years old... the list goes on and on. To paraphrase Malcom Turnbull: there has never been a worse time to be Australian.

 

Now only two sitting days left for the Senate - and this legislation is number 25 on the notice paper.
The Australian Financial review seems to have picked up this issue and has had almost weekly articles about it. Here is the latest:
Labor says an 'urgent resolution' is needed for expat CGT changes
Also the probable next treasurer writes this on his website:
Chris Bowen MP > CAPITAL GAINS TAX ON AUSSIE EXPATS SAGA SET TO GET WORSE

 

You think all those Ministers who are quitting for plum jobs offshore (3-5 year terms) will want that tax issue

Either the last sitting day/s will be very late night rubber stamps. I suspect they will do nothing.

If the bill is not passed before the election, a writ for an election terminates all laws.

I will argue the termination of the bill will create more certainty for expats...for a little while. Until the ALP introduce an equivalent. It will have a later start date and also may get toned down ?? If the Libs win the bill would have a new start date..ie the 30 June 2019 test date could become 30 June 2020

 

Actually the ex-politicians who get parachuted into plum taxpayer funded jobs neatly side-step this issue as they remain Australian tax residents due to the following:

The Commonwealth superannuation fund test

This test only applies to certain Australian Government employees who are eligible to contribute to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS). If this is the case, you (and your spouse and children under 16) are considered to be a resident of Australia regardless of any other factors.

Here's a writeup with Joe Hockey as an example:

https://www.smh.com.au/business/the...al-collateral-tax-damage-20180219-p4z0se.html

 

Ah yes. But that doesnt help their wife who owns the home.

Ex Pollies if posting o/seas will continue to be a tax resident of Australia unless its a UN posting. (The UN isnt a country and a special global member tax treaty applies to UN positions)

 

At least expats had a win in the recent Harding appeal where serviced apartments were held to be considered to be a permanent place of abode.

 

The issues in Harding were quite long term

 

yes but original decision didn't make much sense to be honest unless you have never lived or worked overseas. Obviously on appeal sanity prevailed.

 

So.....what’s the new govt’s position on this? Can’t find the bill on the parliament site anymore but ATO hasn’t removed their blurb...

Does anyone have news?

 

At the moment we know the governments position is that they favour it but its been put on the backburner for the present.

ABC News has asked Treasurer Josh Frydenberg if the Government’s MRE proposals will be revisited at some point in the future.

The Treasurer responded:
❝This remains our Government's policy❞

 

Thanks Mike! What’s the best way of keeping on top of this? Apart from, obviously, pinging the good folks on this board every so often?

 

As soon as we hear anything i'm sure one of us will post about it.

 

*******s. Double standard hypocritical politicians.
IMO Scomo has always been a proxy for Malcolm Turnbull, the Left leaning 'Liberal' who was popular with Labor voters as well. The removal of the CGT exemption for non-residents, stinks of something typical of a Labor government policy - to tax the 'well-healed expats' BS rhetoric.

The whole idea to scrap the exemption as quoted by Morrison when he was the then Treasurer, was as part of the overall strategy to deflate the housing bubble. Now that the bubble has popped and property prices have been slammed down, why continue with the policy? The expat/non-resident Aussies are such a small percentage of overall property owners.

Not only was the Bill not passed, but how many of us sold before the deadline was given on the fear that if the Bill passed anytime before the 30 June, there would be no time left to sell the property in time?

Now Frydenberg is just following suit in stubbornly declining to withdraw their intentions to re-submit the Bill. I believe this is just a face saving exercise now because Labor and others kicked up a stink about it. Plus all the submissions from people affected.

But the untouchable politicians who are not affected do not give a damn about the rest of us. Morrison waving his hands about in Church displaying his total faith to God, really is just playing politics there as well as if he was a decent man he would realise the impact and unfairness this policy is. It really is an ******* of an act IMO and many others.

People voted for Liberal because the basket case Labor option was even worse, but as a Liberal voter all my life, I detest Morrison and wish there was another major contender to go against Labor. Liberal is still too far Left. All this Socialism BS values creeping in to everything these days.

 

The Libs went to the election with that bill before the Parliament. No surprises there. In the Budget before that.

Its now all but law. But for the winter recess its will be back for finalisation in September maybe October
Sitting calendar 2019 – text version – Parliament of Australia