Many people thought that a non resident who derives a capital
gain in respect of Australian assets will not be subject to
Australian tax unless the assets concerned real property. In two
recent cases, the Federal Court has held that where a non fixed
trust distributes capital gains to a non resident of Australia then
that capital gain is assessable to both the trustee of the trust
and the non resident beneficiary – even where the asset
generating the gain to the trust is not taxable Australian real
property.
The decisions in Peter Greensill Family Co Pty Ltd v
Commissioner of Taxation [2020] FCA 559 and N & M
Martin Holdings Pty Ltd v Commissioner of Taxation
[2020] FCA 1186 both concern the sale of shares by an Australian
discretionary trust. In each cases the company whose shares were
sold did not have assets that consisted predominantly of Australian
real property. The capital gains were distributed to non resident
beneficiaries of the trust in each case.
