CGT on foreign residents, temporary residents and changing residency

Ceasing to be an Australian resident

If you ceased being an Australian resident, or ceased being a resident trust for CGT purposes on or after that date, you are taken to have disposed of each of your assets that are not taxable Australian property for their market value at the time you ceased being a resident. In the case of any indirect Australian real property interests and options or rights to acquire such interests, you are taken to have immediately re-acquired these assets for their market value.

Exemption for a temporary resident who ceases being an Australian resident

If you are a temporary resident when you cease to be an Australian resident, you are not taken to have disposed of any of your assets.

Exemption for a short-term resident who ceases being an Australian resident

If you are an individual who was in Australia on 6 April 2006 and have remained here as an Australian resident since that date, an exemption applies if you satisfy certain conditions. You disregard the capital gain or capital loss if you were an Australian resident for less than a total of five years during the 10 years before you stopped being one, and either:

• owned the asset before last becoming an Australian resident, or
• inherited the asset after last becoming an Australian resident.

Choosing to disregard capital gains and capital losses when you cease being an Australian resident

If you are an individual, you can choose to disregard all capital gains and capital losses you made when you stopped being a resident.

If you ceased being a resident and you make this choice, those assets are taken to be taxable Australian property until the earlier of:

• a CGT event happening to the assets (for example their sale or disposal), or
• you again becoming an Australian resident.

The effect of making this choice is that the increase or decrease in the value of the assets from the time you cease being a resident to the time of the next CGT event, or of you again becoming a resident, is also taken into account in working out your capital gains or capital losses on those assets. The way you prepare your tax return is generally sufficient evidence of your choice.

For more information, see Choices you make under capital gains tax.

Find out more For an overview of capital gains tax, see Introduction to capital gains tax. To establish whether or not you are a foreign resident, see Residency - what you need to know. For further information about market valuation, read Market valuation for tax purposes. For help applying this to your own situation, phone 13 28 61.