• Foreign resident capital gains withholding clearance certificate application instructions – for Australian residents

    The Foreign resident capital gains withholding clearance certificate application form is used by Australian resident vendors. A clearance certificate notifies the purchaser not to withhold foreign resident capital gains from the sale of taxable Australian real property (the asset). The application form also provides the details of vendors so we can establish their tax residency status. Where there are multiple vendors disposing of the asset, each vendor should apply for a separate clearance certificate in their name only.

    The entity with the legal title to the asset is required to obtain the clearance certificate. If the legal title of the property is in the name of a trustee holding the property on behalf of a trust or superannuation fund, the trustee should apply for the certificate, not the trust or super fund.

    A vendor can apply for the clearance certificate online (preferred and providing faster processing) or by paper form. The application needs to be completed and lodged with us as early as practical. The vendor will need to provide the purchaser with the ATO-issued clearance certificate. This must be on or before the day of settlement of the sale of the asset to ensure no withholding occurs.

    Who can complete and lodge

    Vendors may complete and lodge the form themselves. They may also have it completed and lodged on their behalf by a third party, for example a solicitor or an accountant.

    Note: Conveyancers, real estate agents and others charging a fee for services (who are not a legal practitioner or registered tax agent) should get the vendor to provide a completed paper PDF version of the form to them who can enter the details in the online form (this ensures faster processing) as part of the settlement process they provide for the vendor.

    Next steps:

    See also:

    How to complete the form

    These instructions explain how to complete each section of the Foreign resident capital gains withholding clearance certificate application form, lodging your application and what happens next.

    Note: Mandatory fields are marked with an asterisk (*).

    If you are unsure of how to complete the form after reading these instructions, you can phone us on 13 28 66.

    Section A: Vendor details

    The vendor should be the entity that has legal title to the asset. If there are multiple vendors on the title, each vendor will need to apply for a separate certificate in their name.

    Note: If the legal title of the property is in the name of the trustee who is holding the property on behalf of the trust or superannuation fund then, it is the trustee who should apply for the clearance certificate, not the trust or super fund.

    Provide as much detail as possible. This will reduce us having to contact the nominated contact person in section C (if completed).

    Each vendor must complete a separate application form.

    The vendor detail fields are:

    • Tax file number (TFN) – enter the vendor's TFN.
      • You are not required to provide the vendor's TFN but it will help us identify the vendor in our records.
    • Australian business number (ABN) – enter the vendor's ABN.
      • You are not required to provide the vendor's ABN but it will help us identify the vendor in our records.
    • *Vendor's name as it appears on the title of the property – if an individual, include your first, other given and last name.
      • *Entity type – place an X in the box that represents your entity type. The entity that has legal title to the asset is the entity required to obtain a clearance certificate.
    • If the entity type of the vendor is an individual, then provide the individual's date of birth.
    • If the entity type of the vendor is a trust, then provide the name of your trustee.
    • If the entity type is 'other', then provide a description of the type of entity you are.
    • Email address of the vendor. This authorises us to respond to you by email. If you do not provide us with an email address it may take longer to provide information to you.
    • Contact phone number – enter the vendor's phone number with area code and country code (if the country is not Australia). Don't include brackets () or spaces in your entry.
    • *Address – enter the vendor's address, including the suburb/town/locality, State/territory, postcode and the country.

    Section B: Transaction dates

    • The contract date or estimated contract date – this is the date as shown on the contract of sale. Usually it is the date of exchange of the contract.
    • Expected settlement date of the asset – enter the expected date of settlement for the sale.

    Section C: Contact person

    Provide your contact details if you are submitting the application as the vendor's representative. This allows us to contact you to resolve any issues and process the form faster.

    We will provide the contact person with a copy of the clearance certificate application decision at the same time we provide it to the vendor.

    If you're a conveyancer who is not a legal practitioner or tax agent, you can be the contact for the purposes of the form. However, you will not be able to answer questions by way of tax advice in relation to the application. We expect you to relay our questions to the vendor. The vendor can provide you with answers which you can communicate to us. Alternatively, you may ask us to contact the vendor directly for further questions.

    The contact detail fields are:

    • Title – the title of the contact person.
    • First name – the first name of the contact person.
    • Other given names – other given names of the contact person.
    • *Last name – the last name of the contact person.
    • Contact email address. This authorises us to respond to you by email. If you don't provide an email address, it may take longer to provide information to you.
    • Phone number – the contact person's phone number with area code and country code (if the country is not Australia). Don't include brackets () or spaces in your entry.
    • Address – enter the contact's address, including the suburb/town/locality, State/territory, postcode and the country.

    Section D: Clearance certificate application questions

    All three questions in this section must be completed by the vendor. Your answers will determine what other sections you need to answer.

    Answer these three questions:

    1. Has your residency status changed since your last tax return or will it change before you sell the asset?    
      • *If you answer 'Yes' to this question then you will need to complete either Section E, F, G or H depending upon your entity status.
    2. Have you lodged an Australian tax return for the last two years?    
      • Answer 'No' to this question if you have not lodged your Australian tax return for the last two years and the due date for lodging returns for those years of income has passed. *If you answer 'No' to this question then you will need to complete either Section E, F, G or H, depending upon your entity status.
    3. Are you holding the property on behalf of a foreign resident or on behalf of other entities that include a foreign resident?

    If you answered 'No' to question 1 or 'Yes' to question 2 then proceed to section I: Declaration. You do not need to complete any of sections E, F, G or H.

    Section E: Entity – Individual

    This section must be completed if the vendor is an individual and has answered either:

    • 'Yes' to 'Has your residency status changed since your last tax return or will it change before you sell the asset?'
    • 'No' to 'Have you lodged an Australian tax return for the last two years?'

    If the entity type of the vendor is an individual then the following information must be provided:

    • *Are you migrating and settling in Australia or have been settled in Australia? If you answer 'Yes' to this question then go straight to Question 3. Otherwise continue to Question 2.  
      • Immigrants must hold a current permanent residence visa, issued by the Department of Immigration and Border Protection, and intend to reside permanently in Australia. New Zealanders do not need a permanent residency visa, however they must intend to reside permanently in Australia.
    • *Are you an Australian returning to live in Australia?    
      • *If you answered 'Yes' to Question 2, answer the following questions:    
        • *What is your main purpose for being in Australia? – select your main reasons for being in Australia
        • *Have you stayed or intend to stay in a particular place continuously for six months or more?
        • *Where do you live in Australia? – select where you live in Australia
        • *Do you have a spouse and/or dependent children?
        • *Where are your spouse and/or dependent children? – select where your spouse/dependent is living
        • *Where do you hold the majority of your assets? – select Australia or overseas
        • *Are you a member of any clubs, churches, community groups or organisations in Australia?
      • *If you answered 'No' to Question 2, answer the following questions:    
        • *Have you stayed or do you intend to stay in Australia for six months or more?
        • *Do you have social or economic ties to a country other than Australia?
    • *Have you been in Australia, either continuously or intermittently, for 183 days or more in the current income year?    
      • If you answered 'Yes' at Question 3, answer the following question
      • *Is your usual place of abode outside of Australia? If you answer 'Yes' to this question then you may answer the following question    
        • Do you intend to take up residence in Australia?

    Section F: Entity – Company

    This section must be completed if the vendor is a company and has answered either:

    • 'Yes' to 'Has your residency status changed since your last tax return or will it change before you sell the asset?'
    • 'No' to 'Have you lodged an Australian tax return for the last two years?'
    • *Is the company incorporated in Australia? If you answer 'Yes', then proceed to Section I. If you answer 'No', then complete the following questions:    
      • *Is any of the property of the company situated in Australia?
      • *Does the company carry on business in Australia?
      • *Is the company's central management and control in Australia?
      • *Is the company's voting power controlled by shareholders who are resident in Australia?

    Section G: Entity – Trust

    This section must be completed if the property title shows the trust fund name without any reference to a trustee and the vendor has answered either:

    • 'Yes' to 'Has your residency status changed since your last tax return or will it change before you sell the asset?'
    • 'No' to 'Have you lodged a tax return in the last two years?'
    • This section requires a 'yes' or 'no' answer to establish residency status of the trust:    
      • *Is this a unit trust? If you answer 'yes' complete all of the following questions    
        • *Is any of the property of the trust situated in Australia?
        • *Does the trust carry on a business in Australia?
        • *Is the trust's central management and control in Australia?
        • *Do Australian residents hold more than 50% of the beneficial interests in the income or property of the trust?
      • *Is this a unit trust? If you answer 'no' complete all of the following questions    
        • *Is the trustee of the trust an Australian resident?
        • *Is the trust's central management and control in Australia?

    Section H: Entity – Superannuation fund

    This section must be completed if the property title shows the superannuation fund name without any reference to a trustee and the vendor has answered either:

    • 'Yes' to 'Has your residency status changed since your last tax return or will it change before you sell the asset?'
    • 'No' to 'Have you lodged a tax return in the last two years?'
    • This section requires a 'yes' or 'no' answer to the following questions to establish residency status of the super fund to any of the following:    
      • *Is the entity an Australian Superannuation Fund?
      • *Was the fund established in Australia or is any asset of the fund situated in Australia?
      • *Is the funds central management and control in Australia?
      • *Does the fund have any member/s who were either    
        • a contributor of the fund at that time
        • an individual on whose behalf contributions have been made? (This is unless the individual is a foreign resident who is not a contributor at the time, and the contributions are for payments when they were an Australian resident.)
      • *Do either of the following apply:    
        • At least 50 % of the total market value of the fund’s assets attributable to superannuation interests held by active members is attributable to Australian residents?
        • At least 50% of the sum of the amounts that would be payable to or in respect of active members if they voluntarily ceased to be members is attributable to Australian residents?

    Section I: Declaration

    *Complete the declaration section of the form.

    Lodging your application

    Lodge your application with us by faxing it or mailing as outlined on the form.

    You should keep a copy of the form.

    What happens next

    We will process your application and notify you of the outcome. If required, we will contact you to resolve or clarify any information.

    If we give you a clearance certificate, you will need to provide a copy to the purchaser on or before settlement.

    Last modified: 22 Nov 2016QC 48979