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  • CGT changes for foreign residents with indirect interests

    On 12 December 2019 the Government passed an amendment to strengthen the foreign resident capital gains tax (CGT) regime. As part of this, foreign resident taxpayers that have indirect interests in entities that hold interest in Australian real property assets in a disaggregated manner will now need to apply the principal asset test (PAT) on an associate inclusive basis.

    The reforms apply from 9 May 2017 and taxpayers will need to review any tax returns lodged from that date to determine if they have correctly complied with the PAT, and seek amendments if needed.

    If an amendment is required and a taxpayer actively seeks to amend assessments within a reasonable timeframe after the law change, no tax shortfall penalties will be applied and any interest accrued will be remitted to the base interest rate.

    We will be active in ensuring CGT compliance in these situations.

    See also:

    Last modified: 12 Feb 2020QC 61387