Level 4, 20 Grenfell Street,
Adelaide SA  5000

Phone: 08 8231 1888
Fax: 08 8231 3888

Email: admin@crase.com.au





 
Latest News
Hot Issues
Businesses ghosting the ATO targeted in debt collection blitz
Claiming the tax-free threshold: getting it right
Aussies tired of ‘dodgy tax criminals’, warns ATO
Protect your small business by following these essential steps.
Super guarantee a focus area for ATO business debt collection
Controversial ‘Airbnb tax’ set to become law
Withholding for foreign residents: an ATO focus area
1 in 3 crypto owners confused about tax, study reveals
20 Years of Silicon Valley Trends: 2004 - 2024 Insights
ATO reveals common rental property errors from data-matching program
New SMSF expense rules: what you need to know
Government releases details on luxury car tax changes
Treasurer unveils design details for payday super
6 steps to create a mentally healthy and vibrant workplace
What are the government’s intentions with negative gearing?
Small business decries ‘unfair’ payday super changes
The Leaders Who Refused to Step Down 1939 - 2024
Time for a superannuation check-up?
Scam alert: fake ASIC branding on social media
Millions of landlords the target of expanded ATO crackdown
Government urged to exempt small firms from TPB reforms
ATO warns businesses on looming TPAR deadline
How to read a Balance Sheet
Unregistered or Registered Trade Marks?
Most Popular Operating Systems 1999 - 2022
7 Steps to Dealing With a Legal Issue or Dispute
How Do I Resolve a Dispute With My Supplier?
Changes to Casual Employment in August 2024
Temporary FBT break lifts plug-in hybrid sales 130%
The five reasons why the $A is likely to rise further - if recession is avoided
June quarter inflation data reduces risk of rate risk
‘Bleisure’ travel claims in ATO sights, experts warn
Taxing unrealised gains in superannuation under Division 296
Most Gold Medals in Summer Olympic Games (1896-2024)
Articles archive
Quarter 3 July - September 2024
Quarter 2 April - June 2024
Quarter 1 January - March 2024
Quarter 4 October - December 2023
Quarter 3 July - September 2023
Quarter 2 April - June 2023
Quarter 1 January - March 2023
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 4 of 2016
Articles
Big-ticket tax set for government review
FBT – Christmas Parties and Taxi Fares
Unclaimed Monies - Christmas Project?
Employee Christmas Parties and Gifts – Any FBT?
‘Beware the tax man’ eyeing holiday period activity
Merry Christmas for 2016, a Happy New Year and a prosperous 2017.
Research reveals key to ‘high-performing’ firms
Late payments hitting SMEs hard
Estate planning issues flagged with $1.6m pension transfer cap
New fleet “safe harbour” approach for car fringe benefits
Travel to a workplace: What’s in, what’s out
Struggling Business Turnarounds
SMSF practitioners told to urgently address TRIS issues
$20,000 write off is only available for small business, right? Well…
Do you need an Employment Agreement?
What does the new withholding tax mean for your clients?
Domestic (non-marital) Relationships
Is there a problem with using your company’s assets for yourself?
SMEs at risk of ‘falling foul’ of ATO
Scams, fraudsters and viruses
Got your car log book ready?
What does the new withholding tax mean for your clients?

 

It's important to be across the new “non-final withholding tax regime” came into effect on 1 July 2016, potentially impacting anyone buying or selling property.



       


 


The new regime is aimed at foreign residents who sell Australian property, requiring 10 percent of the sale price to be withheld. 


It is a significant change in tax law and applies to real estate; interests in Australian entities whose majority assets consist of real estate; and options or rights to acquire such interests.


Perhaps the key aspect of the new tax is that it effectively shifts the tax collection and remittance of the 10 percent withholding tax to purchasers of property.


While it does not apply to the sale of properties with a market value under $2 million or shares listed on an approved stock exchange, it still has a number of implications for both Australian and foreign vendors and purchasers of real estate if not managed appropriately.


Purchasers


Anyone who purchases property from foreign residents will potentially be obliged to act as “tax collector” on behalf of the Australian government.


Accordingly, we expect many purchasers to demand a “clearance certificate” from vendors prior to settlement, to prove the vendor is an Australian resident, or else an approved ATO variation notice if the vendor is a foreign resident but believes the withholding tax is inappropriate in their situation.


If the 10 percent withholding tax is applicable, purchasers will be required to complete an online ‘Purchaser Payment Notification’ form to provide details of the vendor, purchaser and the asset being remitted to the ATO.


Purchasers must pay the withheld amount on or before settlement.


Vendors


Australian residents


Australian residents may need to provide proof to a purchaser that they are not a foreign resident and therefore not liable for the withholding tax.


The ATO can provide a ‘clearance certificate’ which vendors can give to prospective purchasers to confirm their Australian residency status.


Clearance certificates are valid for 12 months and people can apply for one at any time they are considering selling their property, including prior to listing for sale. With sufficient planning, we would recommend this as the preferred approach.


Foreign residents


Foreign residents subject to the new withholding tax requirements can apply for a variation to reduce the amount of the tax if they believe that 10 percent is inappropriate (for example because the property will be sold at a capital loss). This variation can be done via an on-line form from the ATO.


It is important the notice of variation is provided to the purchaser before settlement to ensure the reduced withholding rate applies.


In addition, this new regime operates as a “non–final withholding tax.” This means foreign residents are still required to submit an Australian tax return reflecting the sale of the property and the 10 percent amount withheld will be factored into the final tax payable (or refundable) to vendors.


 


Josh Chye, HLB Mann Judd
Tuesday, 13 September 2016
Accountantsdaily.com.au




14th-October-2016
      Site By AcctWeb