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  • Paying the withholding

    A purchaser must pay us the withholding equal to 12.5% of the first element of the CGT asset’s cost base (the cost base is generally equal to the purchase price). Where no money is paid or required to be paid, or the agreed amount is under market value, then the 12.5% withholding is on the market value of the CGT asset.

    Note: The first element of cost base doesn't include any disbursements at settlement (for example, for council rates, water and sewer charges and strata levies). Therefore, the withholding amount is 12.5% of the purchase price before adjustment for disbursements.

    The purchaser is liable to withhold and pay this amount. If this does not occur when it should, we will hold the purchaser liable.

    When the payment is required

    To pay the withholding to us, the purchaser must complete an online Foreign resident capital gains withholding Purchaser Payment Notification formThis link opens in a new window.

    Where there are multiple purchasers one form can be used if there are 10 or fewer purchasers, or purchasers can lodge a form individually.

    Once a payment notification form is processed, a payment reference number (PRN) will be issued, along with a PDF icon that can be clicked on to obtain a downloadable payment slip and barcode to use at Australia Post.

    Only one PRN is issued per purchaser payment notification form, even if multiple purchasers are supplied on the form.

    The purchaser (or purchasers) must pay the withholding to us on or before the day they become the owner of the asset, and they require the PRN, payment slip and barcode to do this. Without these, the purchaser will not be able to make the payment at Australia Post.

    We encourage purchasers to submit the payment notification form to us as early as possible, to ensure they have the payment reference number at settlement.

    If the purchaser fails to obtain a PRN and pay the withholding when they become the owner of the asset, general interest charges will be imposed.

    There is a short grace period from, and including the day of settlement, for the withholding to be paid in full. General interest charges will accrue from the date of settlement if we don't receive the withholding within the grace period.

    All parties should view the Purchaser payment notification form before settlement proceeds and should contact us if there are changes to the settlement date on the form.

    Purchaser payment notification form

    Purchasers are not required to notify us of a transaction if:

    When an amount is required to be withheld, a foreign resident capital gains withholding purchaser payment notification form must be completed by all the purchasers involved in the sale. The purchaser will need to provide the details of the vendors and the asset in the application.

    Once a payment notification form is processed, a PRN will be issued and a PDF icon they can click to obtain a downloadable barcode to use at Australia Post will be generated. It is recommended that the downloadable barcode always be printed to avoid keying errors.

    Only one PRN is issued per purchaser payment notification form, even if multiple purchasers are supplied on the form.

    The full payment can be made using the PRN or payment slip provided. Where two or more purchasers are included in the transaction, they can choose to make separate payments and use the same PRN or payment slip.

    How to pay

    There are three methods the purchaser can use to pay us.

    1. Transfer the amount via electronic funds transfer (or BPAY®)    
      • Bank: Reserve Bank of Australia
        BSB: 093 003
        Account number: 316 385
        Account name: ATO direct credit account
        Reference: Your payment reference number
       
    2. In person at Australia Post      
      • the purchaser will need the barcode supplied to them after lodgment of the Foreign resident capital gains withholding purchaser payment notification. The post office accepts cheques up to $100 million.
       
    3. Mail a cheque to us with the PRN (Note: Large withholders may pay the subdivision 14-D withholding amount by non-electronic means)      
      • Australian Taxation Office
        Locked Bag 1936
        ALBURY  NSW  1936
        Australia
       

    After payment has been made

    A receipt from either Australia Post or the ATO is proof the purchaser has made the payment and fulfilled their obligations.

    A payment confirmation email or letter will be sent to the nominated contact on the purchaser payment notification form.

    Confirmation will be sent by email if an email address is provided in the foreign resident capital gains withholding purchaser payment notification, otherwise it will be mailed to the address of the contact.

    Vendors will need a copy of the payment confirmation and use this information to complete their tax return.

    How to pay when travelling

    We have an online version of the form, which provides an automatic PRN.

    Only use this PDF form if you anticipate not having internet access:

    Compulsory acquisitions by government authorities

    Certain Australian government authorities can exercise powers under State and Territory legislation for the compulsory acquisition of real property. Generally the property is acquired, and ownership of the property passes, on the date that the acquisition is published in the relevant government gazette.

    In the context of a compulsory acquisition certain practical difficulties arise in connection with determining whether or not there is an obligation to withhold and working out the withholding amount to be paid on or before the day the acquisition is published in the gazette. For example, the market value of the property being acquired may be the subject of a dispute at the time the acquisition is published.

    Payment of withholding tax

    Under section 14-200 of Schedule 1 to the Tax Administration Act 1953, the Australian government authority is required to pay the foreign resident capital gains withholding tax on or before the date that the authority became the property’s owner.

    Deferral of payment

    Subsection 255-10(2A) of Schedule 1 of the Taxation Administration Act 1953 allows the Commissioner to defer the time for payment of tax-related liabilities (including withholding tax) due and payable by a class of taxpayers. The Commissioner defers the payment by publishing a notice on our website. The Commissioner can defer the time for payment whether or not the liability has already arisen.

    Notice

    Until further notice, the Commissioner of Taxation has deferred the time for which the foreign resident capital gains withholding tax liabilities of an Australian government authority are due and payable where:

    The exercise of the compulsory acquisition power is authorised under one or more of the following Acts:

    • Acquisition of Land Act 1967 (Queensland)
    • Land Acquisition (Just Terms Compensation) Act 1991 (New South Wales)
    • Land Acquisition Act 1969 (South Australia)
    • The Land Acquisition and Compensation Act 1986 (Victoria)
    • Land Acquisition Act 1993 (Tasmania)
    • Land Administration Act 1997 (Western Australia)
    • Land Acquisition Act 1994 (Australian Capital Territory)
    • Land Acquisition Act 1978 (Northern Territory)
    • Land Acquisition Act 1989 (Commonwealth of Australia).

    For an Australian government authority that is exercising its compulsory acquisition powers under one or more of the above Acts in relation to a compulsory acquisition, the due date for payment of the foreign resident capital gains withholding tax is deferred to the earlier of:

    • 14 days after agreement or final determination of the compensation payable
    • 14 days after agreement to pay an advance amount of compensation.

    As a consequence of this we will accept the government authority as meeting its obligation for the purposes of the withholding if it receives a valid clearance certificate from the vendor by the earlier of:  

    • 14 days after agreement or final determination of the compensation payable
    • 14 days after agreement to pay an advance amount of compensation.

    In terms of the amount of withholding it will be based upon the compensation amount paid that is equivalent to the first element of the CGT asset cost base (being that of the taxable Australian real property subject to the gazettal).

    As a compensation amount could include a value for disturbance and professional expenses or other assets other than the property, the government authority would need to establish a market value break-up of the payment related to the property, and only withholding on that amount.

      Last modified: 23 Apr 2019QC 48972