No Capital Gains Tax - Foreign Property Owners

[Captain G]

No CGT for foreign property owners !! Why ?? No wonder they're all buying up big. Will they pay any form of tax on their profits ?? If not it's a complete joke !! Here we go again selling out on our kids futures.

 

[satanoperca]

Hi,

Do you have any reference to this?

KRUDD should be stoned for treason. What did those diggers fight for in WW1 & WW11?

If foreigners can own property and not pay any CGT on profits then govnuts have lost the plot.

Cheers

 

[Tatts]

I found this in regards to an amendment to CGT rules in December 2006. Is your information from prior to this amendment? I think this is saying that foreign residents are liable for CGT although i may not be interpreting this correctly.

I've put a link underneath to the page i took this from with more information.

The amendments replace the concept of “necessary connection with Australia” with the concept of “taxable Australian property.” Under the new provisions, a foreign resident will be subject to the CGT provisions if they hold “taxable Australian property” as defined by the Act and a CGT event happens concerning that property.

Broadly, taxable Australian property includes:

real property located in Australia;
membership interests in resident or non-resident entities that directly or indirectly own real property in Australia (and which comprise 50% or more of their asset base, as calculated under a prescriptive test); and
assets that are used in carrying on business in Australia via a permanent establishment.

http://www.mallesons.com/publications/2006/Dec/8723065w.htm

 

[crazy-panda-eyes]

^Concur with Tatts above

According to my delightful book on Australian Law - The general rule is that a foreign resident makes a capital gain or loss in regards to a CGT event that is a 'taxable Australian property" TAP

The scope of TAP includes investment property and non-portfolio shares

Can also be seen in legislation: sec 855-15 (http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s855.15.html)
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