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ATO concerned non-residents incorrectly reporting ‘taxable Australian property’


The ATO has expressed concerns that non-resident taxpayers are incorrectly or falsely reporting CGT assets as not being taxable Australian property (TAP) to avoid tax on disposal of the asset. In response, is currently reviewing arrangements where foreign residents are:


  • Structuring investments in companies or trusts that hold Australian real property in such a way that each entity holds an interest of less than 10% (i.e. so those shares or units are not TAP);

  • Attributing significant value to non-taxable Australian real property assets to reduce tax when disposing of taxable Australian real property; or

  • Dissipating funds by transferring them offshore prior to meeting Australian tax obligations.

Taxpayers who may have entered into such an arrangement (or are contemplating doing so) are being encouraged to contact the ATO, obtain a private ruling, or seek professional tax advice. There is also scope to make a voluntary disclosure to reduce penalties that may apply.


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