Foreign resident capital gains withholding rate variation application

The ATO has updated its instructions to vendors seeking a reduction in the withholding rate that will apply to the sale of certain taxable Australian property.

The relevant foreign resident capital gains withholding variation application form provides the details of the vendor, the asset and the reason for a variation.

The variation may reduce the withholding rate to nil.

Among other things, details of additional supporting information that are to be attached to an application are provided.

These will depend on the reasons for the variation and the circumstances of the transaction, eg related party transactions, market valuations, roll-over provisions, carry forward losses and main residence exemption, and cost base details.

The vendor will have to provide the purchaser with an ATO issued variation notice on or before the day of settlement of the asset to ensure the reduced rate of withholding applies.

Each vendor must lodge their own application. Vendors who are parties to the same property transaction are not able to lodge joint applications.

The online version of the form is the preferred method of lodgement and any successful variations will be issued faster.

Alternatively the paper form is available, if you are unable to lodge online or prefer to lodge via post.

For more information or guidance, please contact:

Martin van der Saag
Director
T: 02 9984 7774
E: martinv@northadvisory.com.au

Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au

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