ARTICLE · 07 JULY 2006

Australian CGT For Foreign Residents – Changes To Capture Provisions

DLA Piper Australia

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The Tax Laws Amendment (2006 Measures No 4) Bill 2006 proposes changes to Australian capital gains tax (CGT) for foreign residents.

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The Tax Laws Amendment (2006 Measures No 4) Bill 2006 (Bill) proposes changes to Australian capital gains tax (CGT) for foreign residents, providing them with greater flexibility and efficiency in structuring their Australian investments and aligning Australia’s tax policy with current OECD practice.

Background

The Bill was introduced into Parliament on Thursday 22 June 2006 and contains major reforms affecting the imposition of Australian CGT on foreign residents; mainly contained in new Division 855 of the Income Tax Assessment Act (1997). These changes seek to align Australian CGT law with prevailing OECD practice. Further, they implement a substantial shift in Australia’s tax policy as announced by the Treasurer in the 2006 federal budget and, to some extent, have relied on certain OECD and Canadian precedent.

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