Effective from 7 September 2016, the Commissioner for Taxation
has issued a variation which clarifies the application of the
Foreign Resident Capital Gains Tax Withholding Regime ("the
Regime") to deceased estates. The Commissioner's
determination states that where, as a result of the death of an
the legal personal representative acquires the relevant asset
following the death of the individual;
a beneficiary obtains ownership of the relevant asset by way of
direct transfer from the deceased or by transfer from the legal
personal representative of the deceased; or
a surviving joint tenant acquires the deceased joint
tenant's interest in the relevant asset;
the amount to be paid to the Commissioner in relation to the
transactions is varied to nil.
The Regime commenced on 1 July 2017 and required a clearance
certificate (or variation) to be obtained on the transfer of
Australian Taxable Property (which includes real estate) with a
value greater than $2 million. The purpose of the legislation is to
ensure that foreign residents pay capital gains tax. The Regime
presumes that any person disposing of Australian Taxable Property
is a foreign resident, unless a clearance certificate (or a
variation) is granted.
However, since its introduction, the Regime created an
additional burden for wills and estates solicitors who might be
required to obtain more than one clearance certificate for a
property as a part of the administration of the estate. Further,
the vast majority of estates concern those who are all Australian
tax residents. Thus the Commissioner's variation is a welcome
relief for wills and estates practitioners.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
A superannuation interest or superannuation payment may be split between partners when the relationship has broken down.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).