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Capital Gain Tax from share for temporary resident

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I'm confuse about capital gain tax on share for temporary resident. If I’m holding Temporary Visa and live in Australia more than 183 days. And then I bought some stocks, and I earned capital gain from Australia stocks market. Do I need to pay capital gain taxes on share profit and dividends?

 

I recevied two different suggestions. So which one is right?

 

One suggestion is:

 

768-915 of the Income Tax Assessment Act 1997 states that a capital gain or capital loss you make from a CGT event is disregarded if:

a. you are a temporary resident when, or immediately before, the CGT event happens; and

b.you would not make a capital gain or loss from the CGT event, or the capital gain or loss from the CGT event would have been disregarded under Division 855, if you were a foreign resident when, or immediately before, the CGT event happens.

 

Section 855-10 of the ITAA 1977 states that you disregard a capital gain or captial loss form a CGT event if:

a. you are a foreign resident and

b. the CGT event happens in relation to a CGT asset that is not a taxable Australian property.

Shares in a resident company do not satisfy the definition of taxable Australian real property. Therefore, capital gain tax is not payable when the shares are disposed of where the taxpayer is a temporary resident of Australia.

 

Another suggestion is:

I will be a Australian resident for tax purposes because I spend more than half year live in Australia, I only need to declare income derived in Australia. And the length of time I hold my shares is relevant because individuals can usually discount a capital gain by 50%, where I have held the asset for more than 12 months.

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Hi @Yuxue,

 

Great question!

 

To understand whether you need to pay capital gains tax, you first need to work out if you are an Australian or foreign resident for tax purposes. It is worth noting that we don't use the same rules as the Department of Home Affairs so it's best to refer to our residency tests to determine your tax residency.

 

If you're a foreign resident for tax purposes you must declare on your tax return any income earned in Australia, including capital gains on Australian assets. For further clarification on whether you need to lodge, you can refer to our Do I need to lodge a tax return calculator.

 

I hope this helps!

 

Thanks,

EmilyW

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Hi @Yuxue,

 

Great question!

 

To understand whether you need to pay capital gains tax, you first need to work out if you are an Australian or foreign resident for tax purposes. It is worth noting that we don't use the same rules as the Department of Home Affairs so it's best to refer to our residency tests to determine your tax residency.

 

If you're a foreign resident for tax purposes you must declare on your tax return any income earned in Australia, including capital gains on Australian assets. For further clarification on whether you need to lodge, you can refer to our Do I need to lodge a tax return calculator.

 

I hope this helps!

 

Thanks,

EmilyW