TAX ALERT - CAPITAL GAIN WITHHOLDING REGIME IS RELEVANT FOR ANY TAXPAYER SELLING CERTAIN PROPERTY ASSETS!
From 1 July 2017, there is now a very quick simple rule - if you are a purchaser of property for more than $750,000 then you must withhold unless the vendor shows you a clearance certificate or a variation certificate.
Introduction: The Foreign Resident Capital Gains Withholding ("FRCGW") regime commenced on 1 July 2016, and we are now one year on, it is necessary to give an update of these rules.
The terminology "foreign resident" is slightly misleading. We must stress that this obligation arises regardless of whether the vendor is a foreign resident or not.
On 1 July 2017, the following important changes to the FRCGW regime took effect:
1. The withholding rate increased from 10% to 12.5% and,
2. The market value threshold reduced from the current $2 million to $750,000.
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