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Non-Residents of Australia and Capital Gains Tax

Non-Residents of Australia and Capital Gains Tax

Non-residents of Australia have always been subject to Australian taxes on any income, or gains on disposal, arising from owning real property. As a non-resident if you owned real property in Australia you generally had to lodge an Australian income tax return showing the income from that real property.

Until 7.00pm on 8 May 2012, if you made a capital gain on the sale, providing you had held the real property for at least twelve months you would obtain a 50% discount on the capital gain. Effectively, this meant that only half of the capital gain on disposal had to be included in your Australian income tax return. This changed on 8 May 2012.

After 8 May 2012 non-residents must re-calculate their entitlement to any CGT discount. As with most matters pertaining to income tax the calculations may not be simple. The calculations become even more complex if you had been a resident of Australia for tax at an earlier time but are a non-resident at the time of disposal.

To be on the safe side if you hold real property in Australia you would be wise to have it valued at 8 May 2012. You will still be eligible for the full 50% discount on the gain up to that date. This will not be the case thereafter.

If you believe you fall into this category seek advice as to your tax position.

Article added 26.06.13

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