Loading
NikkiATO(Community Moderator)Community Moderator
15 Apr 2026

Hi TacoCat,


The foreign resident capital gains withholding (FRCGW) is a withholding amount, not the seller’s final tax outcome. Here’s how it works:

  • The amount withheld by the buyer and paid to us is credited to the foreign resident seller’s tax account.
  • To determine the actual capital gains tax payable, the seller must lodge an Australian income tax return for the year of sale.
  • If the actual CGT liability is less than the amount withheld, any excess can only be refunded once a tax return is lodged.

If the seller doesn’t lodge a return:

  • the withheld amount is not automatically refunded, and
  • the amount remains credited on the seller’s account.
  • the seller would be treated as a non‑lodger and we may take follow‑up action to obtain a return, depending on the circumstances.

So, while we don’t treat the withholding as final tax, a refund can’t be issued without a lodged return. The amount stays on the seller’s account until their Australian tax obligations for that transaction are finalised.

5 views
0 replies
  • Avatar of platypus
Liked by TacoCat and Bruce4Tax
5 views
0 replies
Loading
RE: Foreign resident capital gains withholding, no tax return submitted | ATO Community