Foreign Resident Capital Gains Withholding Variation processing time

Does anyone have recent experience on how long the ATO is currently taking to process Foreign Resident Capital Gains Withholding Variations? Without this variation certificate the buyer needs to send 12.5% of the sale price to the ATO. Thanks!

 

It varies. Processing times are being hit by many issues. Likely within the 28 day service period IF lodged online. If paper it is longer - even 58 days. The hard part is you must ensure the buyer performs this online for EACH vendor or it may fall outside the service period. Inconsistent data etc can also mean the Commissioner will defer it for exceptions etc.

An application for a variation should be completed well in advance of the settlement date to ensure there is enough time to provide the information required to finalise the application.

Conveyancers, real estate agents and others charging a fee for services (but who are not legal practitioners or registered tax agents) should obtain a completed paper PDF version of the form from the vendor. They can then use the details on the paper form to complete the online form, ensuring faster processing, as part of the settlement process.
In the majority of cases (where we have all the required information), the variation notice will be issued within 28 days. Variation notices will be sent by email if an email address is provided in the application. Otherwise, notices will be mailed to the vendor and the applicant using the addresses provided in the application. The variation notice should be shown to the purchaser before settlement to ensure the reduced withholding rate applies.

 

Thanks for your response - but the above is different from what my solicitor has advised. The solicitor has advised that the vendors have to do this, not the buyer. The buyers needs the variation certificates a few days before settlement, to give time to get bank cheques prepared etc.

 

Your solicitor is right.

It is performed by the vendor and is required prior to settlement.

The certificate is valid for two years .

 

But the vendor cant do anything without the buyer form which is paper. The vendor/s each use the buyer info. The conveyancer etc is not allowed to complete that part online and the danger is if they do it by paper it will delay progress. vendor should do it it (each vendor)

How to apply for a variation
To apply for a variation, the vendor or vendor’s creditor needs to complete the online Foreign resident capital gains withholding rate variation application form. To access the form, visit ato.gov.au/FRCGW.

If the vendor hasn’t lodged a variation certificate online, conveyancers (who are not legal practitioners or registered tax agents) cannot complete the form on behalf of the vendor. They can provide either the PDF version of the variation form (or hyperlink) to the vendor for completion. Conveyancers may submit the completed PDF form to us via mail or fax, or enter the data into the online form (retaining a copy of the vendor-signed PDF form and keeping a printout of data entered into the online form).​

A clearance cert (not available to non-residents) can be performed up to 2 years prior but a variation is specific to a real sale

Capital gains withholding - a guide for conveyancers

 

Sorry, you are correct .

My earlier post was related to Foreign Resident Capital Gains Withholding Clearance Certificate

 

There is no buyer information required when you apply for the variation. The information needed is the contract date, the expected settlement date, and the price. You can upload documents supporting why you want the variation, for example the CGT discount worksheet and clarification of the period for which the main residence exemption applies. Here you need to clarify when the property was first used to produce income, the periods it was used to produce income, and valuations for the dates it was first used to produce income and 12th May 2012, the date the CGT discount was removed from non-residents.

Because of these information requirements, you can't apply for the variation until contracts have been exchanged and the sale price is known.

 

Thanks for the feedback on the process Fred. .We have been considering the post 30 June tax services regarding this issue and your feedback is interesting.

I just entered a dummy 1 July full exempt CGT gain on a former home and it did put up roadblacks and suggest that the use of ANY exemption for a main residence may be refused. The ATO expect upload of supporting evidence that allow a exemption to be used (eg death etc). When I entered a contract date before 30 June 2020 it was a kinder and walked me through the worksheet you refer to.

The post 1 July issue will be source of some future "help" posts I suspect
For sales contract pre 30 June there could be some isssues if the ATO decline to approve or people misunderstand what is permitted.

 

Variation forms submitted on-line. I wonder how many of these the ATO gets? As there are two vendors I submitted 2 forms exactly 10 minutes apart - and the sequence numbers are different by 25. So are they getting 150 of these per hour? I'll report back with the actual processing time.

 

The numbering may also include the clearance certificate process.

 

As promised here is the result: First response was within one business day, however there were a few clarifications needed regarding various periods of main residence, income producing periods, 6 year rule etc. to get the calculation right. A bit of emailing back and forth and now it is all sorted and I now have the variation certificates.

So a gold star to the ATO for their quick and efficient response to this!