The withholding payments regime commenced on 1 July 2016
The new rules apply to the disposal of certain taxable Australian property under contracts entered into from 1 July 2016* and may require you to deduct 10% of the contract price at settlement when you act for a purchaser.
Sale agreements should include appropriate clauses to address the withholding obligations and the timing of any compliance steps.
LST Sample: Suggested Template Special Clause – Withholding Payments
Disclaimer: The contents of this template do not constitute legal or commercial advice and should not be relied upon as a substitute for professional advice.
*Note: options granted prior to 1 July but exercised after 1 July are subject to the regime.
TEMPLATE SPECIAL CLAUSE FOR STANDARD FORM CONTRACT
Foreign Resident Withholding Tax – Special Clause for Standard form Contract – Capital Gains Withholding
ONLINE FORMS AND INSTRUCTIONS
The foreign resident capital gains withholding home page has now been updated to include the following links:
- Online Clearance Certificate Application Form and instructions
- Online Variation Application Form and instructions
- Online Purchaser Payment Notification Form and instructions
The following law companion guides provide additional guidance in relation to foreign resident capital gains withholding:
LCG 2016/5 – The Commissioner’s variation power
LCG 2016/6 – Amount payable to the Commissioner
LCG 2016/7 – Options