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cityeast(Initiate)Initiate
15 Aug 2024

Hi,


I am the beneficiary of a estate where the deceased passed away in December 2023. I will inherit 50% of a property with my sister, that was acquired by the deceased in 1984. I have been a non-tax resident for 20 years. We plan to dispose of the property in early 2025. As I understand, this means the sale of the property is CGT-exempt


As I understand it, in 2025 my 50% share would be subject to 15% FRCGW. My question is: am I eligible for a FRCGW clearance certificate? Or do I need to submit an Australian Tax Return in order to claim back the 15% witholding?

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7 replies
394 views
7 replies

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Most helpful replyATO Certified Response

AshleyATO(Tax Time Tech Expert)Tax Time Tech Expert
ATO Certified Response25 Aug 2024

Hi @cityeast,

 

The inheritance of the property is CGT-exempt but the subsequent sale of it might not be. Here is some information on our website about inherited property and CGT. There is also this page on how CGT applies to inherited assets when you dispose of them.


The Foreign resident capital gains withholding (FRCGW) applies to vendors disposing of certain taxable property under contracts entered into from 1 July 2016. The current tax rate for FRCGW is 12.5%, you can read more about the conditions for FRCGW on our website.


A clearance certificate application should be completed and lodged by Australian resident vendors (likely yourself) who do not wish to have an amount withheld by purchasers. You only need to worry about a variation if the

  

If you are a foreign resident, or the deceased was a foreign resident, you are generally not entitled to the main residence exemption when you sell the property.

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Most helpful replyATO Certified Response

AshleyATO(Tax Time Tech Expert)Tax Time Tech Expert
ATO Certified Response25 Aug 2024

Hi @cityeast,

 

The inheritance of the property is CGT-exempt but the subsequent sale of it might not be. Here is some information on our website about inherited property and CGT. There is also this page on how CGT applies to inherited assets when you dispose of them.


The Foreign resident capital gains withholding (FRCGW) applies to vendors disposing of certain taxable property under contracts entered into from 1 July 2016. The current tax rate for FRCGW is 12.5%, you can read more about the conditions for FRCGW on our website.


A clearance certificate application should be completed and lodged by Australian resident vendors (likely yourself) who do not wish to have an amount withheld by purchasers. You only need to worry about a variation if the

  

If you are a foreign resident, or the deceased was a foreign resident, you are generally not entitled to the main residence exemption when you sell the property.

cityeast(Initiate)Initiate
26 Aug 2024

Hi Ashley,


According the the links you provided,the sale is CGT-exempt if it occurs within 2 years of death, as the deceased acquired the property in 1984, prior to CGT laws coming into force.


Unfortunately your answer isn't clear (copy paste error?) on whether a variation certificate would be a option in my case...they are not really mentioned in the FRCGW link.

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