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Hi,
Since sending our newsflash about Capital Gains Tax Withholding provisions changing on 1st July 2017, we have received a number of phone calls from clients asking what they (the Agent) need to do in respect of these provisions.
The answer is simple - Absolutely Nothing!
Where monies are to be withheld in accordance with this legislation, it will usually be done as part of the settlement process and should not affect an agent's responsibilities in respect of a real estate transaction.
Having said this: Agents would be advised to make Vendors and Buyers aware of the situation where a property is likely to sell for $750,000 or more. ADL has assisted in this matter by providing the following in regard of each party's obligations in respect of the provisions:
A prominent item (Capital Gains Withholding Payment) in ADL's Selling Agency Agreements
Clearance Certificates
Where a Vendor is an Australian resident and wishes to obtain a Clearance Certificate from the ATO to avoid part of the proceeds of their sale being withheld, they would be wise to apply for the certificate well in advance of settlement.
Where there are multiple Australian resident Vendors disposing of the asset, each Vendor should apply for a separate clearance certificate in their name only.
Australian residents not required to lodge tax returns, such as aged pensioners, are still required to obtain a clearance certificate.
Once a Certificate is received it remains in place for twelve (12) months.
You may direct Vendors to apply for a Clearance Certificate by following the link below:
https://www.ato.gov.au/FRWT_Certificate.aspx
Variations
Where the Vendor is NOT an Australian resident or CANNOT obtain a Clearance Certificate they may be entitled to apply for a Variation (to the Withholding Rate). For an explanation of when a Variation can be applied for, the Vendor can use the following link:
https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Calculating-a-capital-gain-or-loss/Capital-gains-withholding--Impacts-on-foreign-and-Australian-residents/#Variations
For full instructions on applying for a Variation the Vendor can use the following link:
https://www.ato.gov.au/Forms/Foreign-resident-capital-gains-withholding-rate-variation-application-instructions/
For further information about the CGT Withholding provisions Vendors and Buyers should seek professional advice or contact the ATO.
1. Updating ADLForms
ADLForms should automatically update to allow access to the new forms and the latest version of the software (9.4.6) when you first open ADLForms on Saturday 1st July. If this does not occur then:
- Click the 'Update' button from the main menu of the program. Please allow a few minutes for the forms and/or program to download and install.
- If this fails to update your forms then:
- Select Tools -> 'Re-initialise ADLForms’ from within the Main Menu of the ADLForms program. This will close the program.
- Restart ADLForms and click the 'Update' button.
- If you still do not have the updated forms click here to download and re-install ADLForms.
- If all the above do not result in a successful forms and program update please contact our tech support team for assistance.
Click on the link below to:
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