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Edited version of private advice
Authorisation Number: 1051527669626
Date of advice: 12 June 2019
Ruling
Subject: Acquisitions of taxable Australian property from foreign residents
Question
Will the acquiring entity have an obligation under section 14-200 of Schedule 1 to the Taxation Administration Act 1953 to pay an amount to the Commissioner on or before the day of the acquisition of the shares?
Answer
No
Relevant facts and circumstances
All of the shares in Target Co. are acquired by the acquiring entity.
There may be some foreign resident shareholders of Target Co.
The market value of taxable Australian real property (TARP) Assets of Target Co is less the market value of the non-TARP assets
Reasons for decision
As the market value of TARP assets will be less than the market value of non-TARP assets at the time the scheme is implemented, the shares of Target Co. do not pass the principal assets test in section 855-30 resulting in the shares not being an IARP interest. Therefore, the acquiring entity will not be required to pay an amount to the Commissioner on the acquisition of the Target Co. shares.