It should be noted that S.14-215(1) of Schedule 1 provides a list of other exclusions from the application of the foreign resident CGT withholding rules, involving the following transactions:
- A transaction that is on an approved stock exchange.
- A transaction conducted using a broker-operated crossing system.
- A transaction that already gives rise to another withholding obligation (other than GST withholding under Subdivision 14-E of Schedule 1, as discussed later in the notes).
- A transaction regarded as a security lending arrangement which is eligible for CGT roll-over relief under S.26BC of the ITAA 1936.
- A transaction involving a seller that is a foreign resident company under external administration at the time of the transaction.
- A transaction arising from:
- the administration of a bankrupt estate;
- a composition or scheme of arrangement;
- a debt agreement;
- a personal insolvency agreement; or
- any same or similar circumstances (as those mentioned above) under a foreign law.
Note, while most of the above exclusions most commonly apply to the acquisition of indirect Australian real property interests, technically, the exclusions can also apply to the acquisition of TARP. Accordingly, buyers should review whether an exclusion applies prior to withholding.
What information must a seller provide to a buyer?
Under the foreign resident CGT withholding rules, a seller generally seeks to provide information to a buyer for two reasons, these being (where applicable) to avoid the buyer withholding an amount at settlement (e.g., by providing a clearance certificate when selling TARP), and to reduce the withholding rate (e.g., by providing a valid variation notice).