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Withholding tax to recoup CGT

Withholding tax to recoup CGT

By Russell Cocks

Practice & Procedure Taxation 


All sales of real estate over $2 million made after 1 July 2016 will be presumed to be made by a foreign resident and therefore be liable to a 10 per cent withholding payment unless the vendor obtains a clearance certificate from the ATO. Tips Vendor Check consistency between ownership and tax records. Apply for clearance certificate online. Purchaser Unless the vendor provides a clearance certificate you must withhold 10 per cent. The Australian Tax Office (ATO) is concerned that foreign residents are not paying capital gains tax (CGT) and has introduced a “withholding payment” regime obliging purchasers to withhold and pay to the ATO 10 per cent of the purchase price on account of the vendor’s CGT liability.

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