The ATO has released the details of how it will administer the new foreign resident CGT withholding payment regime.
The new withholding regime introduces a 10 per cent non-final withholding on payments made to foreign residents under contracts entered into on or after Friday 1 July 2016 to dispose of certain taxable Australian property consisting of:
- real property in Australia – land, buildings, residential and commercial property
- lease premiums paid for the grant of a lease over real property in Australia
- mining, quarrying or prospecting rights
- interests in Australian entities whose majority assets consist of the above such property or interests
- options or rights to acquire the above property or interest
An exclusion applies where the market value of the CGT asset is below $2 million.