April 2016 Edition

In this edition:

Welcome

ATO's ongoing focus: car fringe benefits

Property acquisitions from foreign residents

Valuing SMSF assets

Which two heads are better than one?

New legislation has been passed which states that a 10% non-final withholding tax must be sent to the ATO if the seller of an asset is a foreign resident.

Effective from 1 July 2016, the 10% non-final withholding tax applies to anyone purchasing real property worth $2 million or more. The amount that is to be withheld by the purchaser is 10% of the purchase price.

If the seller is an Australian resident and wants to avoid 10% being withheld, they must provide the purchaser with a "Clearance Certificate" issued from the ATO to prove that they are an Australian resident.

The big catch is that it is the vendor's (purchasers) responsibility to obtain a Clearance Certificate. Otherwise the purchaser must withhold funds and remit 10% of the purchase price to the ATO.

The ruling does not only apply to purchase of real property. It also includes the purchase of shares in a company or units in a trust where the entity predominately owns real property. This is referred to as an indirect real property interest.

An exemption will apply if:



• The purchase of shares/units is on an approved stock exchange
• There is no indirect real property interest
• The seller is an Australian resident

Please contact your Goodwin Chivas & Co team member for further information.