In this edition:
New tax affects property, shares and trusts
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:
Please contact your Goodwin Chivas & Co team member for further information.
Suite 401 29-31 Solent Circuit
Norwest Business Park
Baulkham Hills, NSW 2153 Australia
View location map
P:
(02) 9899 3044
F: (02) 9899 1524
Our Team Members are the heart and soul of our business. Our team's guiding principles are integrity, respect, teamwork, achievement and innovation. Our guiding principles are the keys to our culture and to achieving our vision.
We offer a range of free and easy to use
online resources and tools including...