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  • Treatment of taxable Australian property

    The capital gains liability of foreign residents is limited to taxable Australian property (Division 855 of the Income Tax Assessment Act 1997). This has led to foreign residents claiming CGT assets are not taxable Australian property.

    Our concerns

    We are reviewing arrangements where foreign residents are:

    • structuring investments in indirect Australian real property interests in such a way that each entity holds an interest of less than 10%
    • attributing significant value to non-taxable Australian real property assets to reduce tax when disposing of taxable Australian real property
    • dissipating funds by transferring them offshore prior to meeting Australian tax obligations.

    What you should do

    Foreign investors in Australian real property should read Indirect Australian real property interests to see if we may be concerned with any investment arrangements.

    If you have entered, or are contemplating entering, into an arrangement of these types we encourage you to:

    See also:

    Last modified: 12 Dec 2019QC 60948