Tax Commissioner Michael D’Ascenzo today issued two taxpayer alerts warning foreign residents selling indirect holdings in Australian real property about arrangements that attempt to avoid Australian capital gains tax.
The alerts cover arrangements that attempt to circumvent indirect holding rules through staggered sell down arrangements and manipulation of the value of assets.
Tax Commissioner Michael D’Ascenzo said in the current economic environment he is concerned foreign resident vendors may be tempted to try to avoid their Australian capital gains tax obligations.
“The Tax Office closely monitors disposals of real property by foreign residents using information from Australia and overseas agencies and has identified several suspect arrangements that attempt to avoid capital gains tax,” Mr D’Ascenzo said.
“Anyone thinking about entering into such arrangements should carefully consider whether a capital gain arises, as we will be actively looking at such arrangements if they prove to be ineffective.
“Taxpayers who are unsure of their tax obligations should seek independent advice from a person not trying to market such a scheme or contact us so that we can help them understand and comply.
“If they are genuinely uncertain they can ask for a free private ruling from us.
“If taxpayers who have entered into such an arrangement come to us before we contact them for an audit, they will be entitled to a reduction in any penalties that may apply.”
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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