Foreign Resident Capital Gains Withholding – Three Years On – Where Are We Now?

Three years after the introduction of the Foreign Resident Capital Gains Withholding rules there have been some evolution in the practice and some surprising instances where the rules can apply.

We spoke with David Earl and Lynn Koh ahead of their presentation at the upcoming VIC 7th Annual Tax Forum on 17-18 October 2019.

The good and the not-so-good

“This session is aimed at briefly revisiting the introduction of the rules, an outline of what they were trying to achieve and the practices that have since developed in the market – both good and not so good” says David.

“We’ll try to help attendees understand when the foreign resident capital gains withholding rules apply and what potential options might be for dealing with the rules” adds Lynn.

Attendees will learn what to look out for in different transaction scenarios, some practical steps, as well as what the ATO’s current views and expectations are, and the risks to be managed from these rules.

 David says, “The ATO have amazing resources and guidance sheets available, so whilst there are few ‘blind spots’ for the uninitiated, there are a number of surprising obligations and expectations that still remain.

“Especially on tax advisors in order to navigate transactions or restructures without having a purchase unwittingly needing to withhold 12.5% of purchase price.”.

“Foreign Resident Capital Gains Withholding can apply to internal group restructures even where the relevant Australian business may be far removed from the transaction taking place” adds Lynn.

David is a Partner within PwC Melbourne’s corporate tax practice where has been practising tax since joining PwC as a graduate in the year 2000. He is a member of The Tax Institute’s National Council and Victorian State Council. He mainly advises inbound multinational groups with respect to their investment in Australia, and predominately focusses on M&A tax and International Tax matters. 

During his time with PwC, David has also spent time on secondment to PwC Netherlands, where he provided a mix of Dutch, Australian and European tax advice to a broad range of international clients. Outside of tax, he enjoys family time, cycling up mountains in summer and skiing down them in winter.

Lynn is a Director within PwC’s Global Tax practice in Melbourne and has over 12 years professional experience as a corporate tax advisor. With a keen interest in cross-border tax issues, her focus is on helping multinational business invest and grow in Australia, and Australian businesses expand offshore. Lynn’s core expertise is in providing international tax, structuring and M&A tax advice to Australian businesses operating offshore and foreign groups investing into Australia. Apart from navigating the dynamic international tax landscape in Australia, she enjoys spending time with her two young children.

The Vic 7th Annual Tax Forum is the leading taxation conference in Victoria. With three dedicated streams, corporate, SME and hot topics, over 45 expert presenters and 34 sessions to choose from, there is something for everyone. Find out more about David and Lynn’s session, and the rest of the program on our website.


Popular posts from this blog

Div 7A: Issues when dealing with loans and unpaid present entitlements

The biggest changes in estate planning in a generation

What happened in tax in October