Non Resident Tax Issue

Hi there. I am trying to track down Australian non residents for tax, who are aware of the tax regulations in Australia. It appears that there have been numerous changes and I have questions relating to the following:

1) Direct investment in shares and managed funds. Are these investments now capital gains tax free for non residents? What is you had shares prior to the 2006 ruling - are they capital gains tax free?

2) Dividends etc - only now subject to 10% with-holding tax?

3) Property - not sure on teh regulations for this? Is it the same as for residents?

Thanks for any help.

According to my latest share purchase paperwork (received today), when purchasing Australian shares, you are required to quote a tax file number (TFN). Failure to quote a TFN will result in the company withholding tax at the highest rate plus medicare levy on any unfranked portion of any dividends received.

Chocolate - thanks for the reply, but that is related to an australian resident for tax purposes. I am a non - australian resident. I am after the tax rules, ie how much tax is applicable etc for a NON resident. I dont pay medicare, and as a non resident I am required to submit my overseas address where I pay a withholding tax that is different to a resident wityh a TFN.

Is this any use? I've given you the link for Capital Gains Tax for non residents from the ATO site. If this page isn't of use, try searching the rest of the ATO website.

http://www.ato.gov.au/individuals/content.asp?doc=/content/64155.htm&pc=001/002/012/014/003&mnu=29565&mfp=001&st=&cy=1

No probs Bickerss,

I was just quoting from a recent share purchase document and it would appear from my interpretation of the document that if you don't supply a TFN that the company is required by law to deduct withholding tax at the highest tax rate ie in Australia it stands at 45%

The below quote is from the ATO website. Also the ATO are happy to supply an answer to any query ( and give you a private ruling if necessary) should you either call them direct or email them.

Hope it all works out in your favour.
Cheers

Non-residents

Withholding tax paid by non-residents is a final tax.

If you were not an Australian resident for tax purposes for all or part of the year, include dividend income paid or credited to you during that period on your tax return unless:

the dividend was fully franked, or
the dividend was not fully franked, but either:
withholding tax was (or should have been) withheld from the unfranked amount, or
the unfranked amount was declared to be conduit foreign income in the dividend statement.
On a separate piece of paper, print ‘schedule of additional information – item 11’. Provide details of any dividend you received during any period you were a non-resident that was not fully franked, and was not declared to be conduit foreign income, or on which you have not paid withholding tax.

Sign your schedule and attach it to your tax return. We will work out the amount of withholding tax you have to pay on the dividends, and advise you of the amount.

Chocolate / Isaf - thanks for the reply. I had checked out the ATO site and had found some general stuff but nothing specific (but maybe I was in the wrong area). I will try to contact them and see what they say. I hadn’t bothered doing that as when i left Australia in 2000 I went to make an appointment with them and it was a waste of time as they had no clue - but maybe they have sharpened up their act recently.

I had seen on the website that it states that a non resident will pay no tax on shares (capital gains tax - as long as it was not property related or didn’t own past 10% of the company) but was (conically) thinking there must be some ''trick'' or I was interpreting the reading incorrectly as why would the government give up any sort of tax (not that I am complaining if they have).

Thanks for your help all.