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Win41(Initiate)Initiate
7 Nov 2021

I am a foreign resident for tax purposes in Australia. I have a managed fund in Australia (started investment while I was a resident) I would like to know how I will be taxed if I sell my managed fund. On the ATO website it says: If you are a foreign resident or a temporary resident, you: pay capital gains tax (CGT) only on your taxable Australian property I have no real estate/property in Australia and I am wondering if it means that, if I sold my managed fund, I would not be taxed in Australia? So would I need to declare my CGT in the country I'm living in, Is that correct? So as I understand it,if I keep holding my managed fund while I'm living overseas, The dividend would be withheld at the 15% tax rate automatically, so I do not need to file a tax return in Australia (as long as I do not have any other income in Australia) However, is it possible that I could do a tax return in Australia and offset my 15% tax by making a concessional contribution to my superfund to make my income zero. I know within my superfund, it will be taxed at 15% anyway so it sounds like there is no meaning to do so, but is that possible to do so even if I am a foreign resident?

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6 replies
3,214 views
6 replies

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ATO Certified Response
BlakeATO(Community Support)Community Support
ATO Certified Response9 Nov 2021

Hi @Win41


Managed funds are not taxable Australian property. This means that when you stopped being a resident for tax purposes, the CGT event would usually happen at that time. When your residency changes, we say you've "disposed" of the CGT assets you hold that are not taxable Australian property.


However, you can choose to defer the taxing point to the earlier of either the day you become a resident again, or the time you actually sell the asset.


This means you'll need to make a choice on when the CGT disposal happens for the managed fund units.


You're correct about the dividend withholding being usually 15% for foreign residents. However, it's a final tax, so it doesn't get reported on your tax return even if you do need to lodge. This means your "claim a deduction for super contributions" won't change your tax paid on the dividends you receive.


You can read about how changing residency impacts CGT and interest, unfranked dividends and royalties for foreign residents on our website.

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