Foreign resident capital gains withholding rate variation application

Overview

Vendors can use the Foreign resident capital gains withholding variation application form to apply for a reduction in the rate of foreign resident capital gains withholding on the sale of certain taxable Australian property (the asset). It provides the details of the vendor, the asset, and the reason for a variation.

The variation may reduce the withholding rate to nil.

Completing the form

Complete the online Foreign resident capital gains withholding rate variation application form.

You can find out more about Capital gains withholding: Impacts on foreign and Australian residents.

When to use the form

The form needs to be completed and lodged with us as early as practical as it can take 28 days to process. The vendor will have to provide the purchaser with an ATO issued variation on or before the day of settlement of the sale of the asset to ensure the reduced rate of withholding occurs.

Each vendor must lodge their own application. Vendors who are parties to the same property transaction are not able to lodge joint applications.

Note: New rules for foreign residents for tax purposes took effect from 9 May 2017. Foreign residents for tax purposes can no longer claim the CGT main residence exemption when they sell property in Australia unless certain circumstances apply.

Foreign residents who already held property on 9 May 2017 can claim the CGT main residence exemption. That is if the CGT event (disposal) of the property occurred on or before 30 June 2020.

As such, only eligible foreign residents for tax purposes can use the CGT main residence exemption as a reason for applying for a variation.

Applications by foreign residents for tax purposes who have requested variations of the withholding amount on the basis that they are disposing of their main residence will be subject to increased scrutiny, particularly where the applicant has never been an Australian resident for tax purposes.

You can find out more information on Foreign residents claiming the main residence exemption as a reason for the variation

Who can complete and lodge

The variation application form should be completed and lodged by a foreign resident to reduce the withholding rate below the 12.5%.

Vendors may either complete and lodge the form themselves, or have it completed and lodged on their behalf by a third party (for example, a solicitor or an accountant).

Conveyancers, real estate agents and other persons charging a fee for services can't complete the form on behalf of the vendor unless they are a legal practitioner or registered tax agent.

However, a vendor may provide a completed paper PDF version of the form to a conveyancer, real estate agent or other person charging a fee for service, who should enter the details in the online form (providing faster processing) as part of the settlement process they provide the vendor.

Entities that are not the vendor may apply for a variation (for example, purchaser, creditor or mortgagee in possession to the asset) – they are considered the 'applicant' for the purposes of this form.

How to complete the form

The form must be completed and submitted in one session. You can't save an incomplete vendor variation form and return to complete it at a later date.

These instructions provide guidance on completing each of the sections and discuss what happens next.

The foreign resident capital gains withholding vendor variation is a smart form and will request specific information based on the information you provide. Mandatory fields are marked with an asterisk (*).

Help is available in the top right-hand side of the form and in these instructions. If you are unsure of how to complete this form after reading these instructions, you can phone us on 13 28 66.

Completing the sections:

• 1. Start new application
• 2. Who can the ATO contact about this form
• 3. Applicant details
• 4. Vendor details
• 5. Asset details
• 6. Variation details
• 7. Attachments
• 8. Declaration
• 9. Confirmation screen

Note: Mandatory fields are marked with an asterisk (*).

1. Start new application

This question determines if you're submitting the application as a vendor of the asset or their representative (for example, lawyer or accountant):

• *Are you submitting this application as a vendor of the asset? – select Yes or No. If you are submitting the form as the vendor's representative select 'Yes'
• Conveyancers who are simply keying the form on behalf of a vendor should select 'Yes'
• If you select 'No', answer *In what capacity are you making this application – if you're not submitting the application as a vendor of the asset, select the available options (for example, mortgagee in possession, creditor or other)

The following option is presented at the end of the start new application section:

• Next – proceed to the vendor details section of the form if the applicant is the vendor, or the contact details section if the applicant is an authorised contact.

2. Who can the ATO contact about this form

If you're submitting the application as the vendor's representative, you must provide your contact details. This allows us to contact you to resolve any issues and process the form in a timely manner.

We will provide the contact person with a copy of the 'Foreign resident capital gains withholding variation application' decision at the same time we provide it to the vendor.

If you're a conveyancer who isn't a legal practitioner or tax agent, you can be the contact person for the purposes of the form. However, if questions are asked, we would expect that you relay these to the vendor. The vendor can then provide you with answers which you can communicate to us. Alternatively, you may ask us to contact the vendor directly should further questions be raised.

The contact details fields are:

• Title – select the title of the contact person from the list provided
• First name – the first name of the person
• *Last name – the last name of the person
• Contact phone number – the contact person's phone number including area code and country code (if the country is not Australia). Don't include brackets () or spaces in your entry
• Contact email address – the email address for the contact person. By providing an email address, you are authorising us to provide information to the contact by email. If an email address isn't provided, it may take longer to provide information to the contact
• *Address – the contact person's address, including the suburb or town or locality, state or territory, postcode and country.

The following options are presented at the end of the contact details section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Next – proceed to the applicant details section of the form.

3. Applicant details

The following information will only be requested if you're not completing this form as the Vendor in section 1.

Entities that are not the vendor may apply for a variation (for example, creditor, mortgagee in possession, purchaser to the asset) – they are considered the applicant for the purposes of this form and must complete this section.

The following questions relate to the applicant and not to the vendor:

• Tax file number (TFN) – enter the applicant's TFN. While you're not required to provide the applicant's TFN, providing your TFN assists us in identifying the applicant in our records which means that we can process the application faster.
• Australian business number (ABN) – enter the applicant's ABN. While you're not required to provide the applicant's ABN, providing your ABN assists us in identifying the applicant in our records which means that we can process the application faster.
• Overseas tax identification number (TIN) in country of residence – enter the applicant's TIN. While you're not required to provide the applicant's TIN, providing your TIN to assist in the prompt processing of this form, provide the overseas TIN number for the applicant.
• Country of residence for tax purposes – select the country of residence for tax purposes of the applicant from the list (if it is known to you).
• *Entity type – select the entity type of the applicant from the list – only select 'other' if the applicant is not one of the specified entity types
  • If the entity type of the applicant is a company, the company detail fields will appear
    • *Company name – the legal name of the company (the name under which the company is incorporated)
    • Business name (if applicable) – the business name or trading name of the applicant
    • Ultimate holding company – the name of the ultimate holding company of the applicant. This is the company that has ownership and controlling interest over the whole group of companies of which the applicant is a member.
     
  • If the entity type of the applicant is an individual, the individual detail fields will appear
    • Title – select the title of the applicant from the list provided
    • First name – the first name of the applicant
    • *Last name – the last name of the applicant.
     
   

If there have been any name changes of the vendor, details can be electronically attached at section 7 Attachments.

• *Date of birth – the date of birth of the applicant in dd/mm/yyyy format (or select from the calendar icon)
• Contact phone number – the applicant's phone number including area code and country code (if the country is not Australia). Don't include brackets () or spaces in your entry
• Contact email address – the applicant's email address. By providing an email address, you are authorising us to provide information to the applicant by email. If an email address isn't provided, it may take longer to provide information to the applicant.
• If the entity type chosen is other entity, the other entity detail fields will appear
• *Entity name – enter the legal name of the applicant
• Business name (if applicable) – the business name or trading name of the applicant
• If the entity type of the applicant is a trust, the trust detail fields will appear      
• *Trust name – enter the legal name of the trust
• *Trustee name – enter the legal name of the entity that is the trustee of the trust
• Business name (if applicable) – insert the business name or trading name of the trust
• Applicant contact details – these fields appear when the applicant is a company, trust or other entity      
  • Title – select the title of contact person from the list provided
  • First name – the first name of the contact person
  • *Last name – the last name of the contact person
  • Job title – the job title of the contact person
  • Contact phone number – the contact person's phone number including area code and country code (if the country is not Australia). Don't include brackets () or spaces in your entry
  • Contact email address – the email address of the contact person. By providing an email address, you are authorising us to provide information to the vendor by email. If an email address isn't provided, it may take longer to provide information to the vendor.
   
• *Address – enter the applicant's address, including the suburb or town or locality, state or territory, postcode and country.

The following options are presented at the end of the applicant details section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Next – proceed to the vendor details section of the form.

4. Vendor details

The vendor is the entity or entities selling the asset. Vendors and all other applicants will need to complete this section. If there are multiple vendors on the asset, each vendor will need to complete a separate variation application (if applicable).

Providing as much detail as possible reduces the likelihood of us having to contact the nominated contact person in section 2 (if completed).

The vendor details fields are:

• Tax file number (TFN) – enter the vendor's TFN. While you're not required to provide the vendor's TFN, providing your TFN assists us in identifying the vendor in our records which means that we can process the application faster
• Australian business number (ABN) – enter the vendor's ABN. While you're not required to provide the vendor's ABN, providing your ABN assists us in identifying the vendor in our records which means that we can process the application faster
• Foreign investment (FIRB) application number – to assist in the prompt processing of this form, provide the foreign investment application number of the vendor
• Overseas tax identification number (TIN) in country of residence – enter the applicant's TIN. While you're not required to provide the applicant's TIN, providing your TIN to assist in the prompt processing of this form, provide the overseas TIN number for the vendor
• Country of residence for tax purposes – select the country of residence for tax purposes of the vendor from the list (if it is known to you)
• *Entity type – select the entity type of the vendor from the list
  • the entity type is the entity that has the obligation to declare any capital gain that arises (if any) from the transaction in its income tax return
  • where the asset is held on behalf of a trust or superannuation fund, then the entity that has legal title (for example, trustee) may not be the same entity as that which has the obligation to declare the capital gain on its income tax return
  • only select other if the vendor is not an entity of one of the specified entity types.
   
• If the entity type of the vendor is a company, the company detail fields will appear
  • *Company name – the legal name of the company (is the name under which the vendor is incorporated)
  • Business name (if applicable) – the business name or trading name of the vendor
  • Ultimate holding company – the name of the ultimate holding company of the vendor. This is the company that has ownership and controlling interest over the whole group of companies of which the vendor is a member.
   
• If the entity type of the vendor is an individual, the individual detail fields will appear
  • Title – select the title of vendor from the list provided
  • First name – the first name of the vendor
  • *Last name – the last name of the vendor.
   

If there have been any name changes of the vendor, details can be electronically attached at section 7 Attachments.

• *Date of birth – the date of birth of the vendor in dd/mm/yyyy format or select from the calendar icon.
• Contact phone number – the vendor's phone number including area code and country code (if the country is not Australia). Don't include brackets () or spaces in your entry.
• Contact email address – the email address for the vendor. By providing an email address you are authorising us to respond to you by email. If you don't provide an email address, it may take longer to provide information to you.
• If the entity type of the vendor is other entity, the other entity detail fields will appear      
  • *Entity name – the legal name of the vendor
  • Business name (if applicable) – the business name or trading name of the vendor.
   
• If the entity of the vendor is a trust, the trust detail fields will appear      
  • *Trust name – the legal name of the vendor
  • *Trustee name – the legal name of the entity that is the trustee of the vendor
  • Business name (if applicable) – the business name or trading name of the vendor.
   
• Vendor contact details – these field appear when the vendor is a company, trust or other entity type:      
  • Title – select the title of the contact person from the list provided
  • First name – the first name of the contact person
  • *Last name – the last name of the contact person
  • Job title – the job title of the contact person
  • Contact hours phone number – the vendor's phone number (including area code) and country code (if the country is not Australia). Don't include brackets () or spaces in your entry
  • Contact email address – the vendor's email address. By providing an email address you are authorising us to provide information to the vendor by email. If you don't provide an email address, it may take longer to provide information to you.
   

The following fields appear for all vendor entity types:

• *Address – the vendor's address, including the suburb or town or locality, state or territory, postcode and country.

The following options are presented at the end of the vendor details section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Next – proceed to the assets details section of the form.

5. Asset details

The asset details are the details of the Australian asset the vendor is selling or disposing of.

If more than one asset is being sold or disposed of under the sale contract, and the ownership percentages of all the vendors involved is the same for all assets, details of the additional assets may be provided at section 7 Attachments.

The asset details fields are:

• *Contract date (or possible contract date) – enter the contract date as shown on the contract of sale. If no contract is yet signed, you can enter an anticipated date
• *Settlement date – enter the date settlement of the sale or disposal of the asset, or when you expect it to occur
• *What type of asset is this application in relation to? – select the type of asset from the list. Available types of asset are membership interests, mining, quarrying or prospecting right and real estate
• If the asset type is membership interest, the membership interest detail fields will appear:     
  • *Entity name – name of entity in which the membership interest is held
  • *Entity type – select the entity type to which the membership interests relates      
    • Available entity types are company, trust and other.
    • Only select other if the entity to which the membership interests relates is not a company or trust.
     
  • Entity Australian company number (ACN) – enter the ACN if the entity is a company
  • Entity Australian business number (ABN) – enter the ABN for the entity (if it has one)
  • *Ownership percentage – this is the percentage of the asset the vendor legally owns.
   
• If the asset type is mining, quarrying or prospecting right, the mining, quarrying or prospecting right detail fields will appear      
  • *Tenement registration number – enter the tenement registration number of the mining, quarrying or prospecting right of the asset
  • *Ownership percentage – this is the percentage of the asset the vendor legally owns
   
• If the asset type is real estate, the real estate detail fields will appear      
  • *Property Address – the street address of the property being sold or disposed of, including the suburb or town or locality, state or territory and postcode
  • Property details – complete the applicable fields for your property. Only some fields will apply, as different descriptors apply for property in different states and territories. The fields are      
    • Volume folio
    • Lot
    • Plan number
    • Plan type
    • Parish
    • Section
    • Block
    • Unit
    • Road
    • Reserve
    • Common property
    • Portion
    • Suburb
    • Book
    • Page number
    • Subdivision
    • Allotment
    • Location.
     
  • *Tenancy – select the tenancy type from the list provided (tenants in common, joint ownership, sole ownership or tenancy inter se)
  • *Ownership percentage – this is the percentage of the asset the vendor legally owns.
   

The following options are presented at the end of the asset details section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Next – proceed to the variation details section of the form.

6. Variation details

The variation details are the details related to the entity or entities seeking the variation.

• *Select each of the reasons for the variation. You can select more than one reason.
• *Reduced rate of withholding requested (percentage) – enter the reduced rate of withholding you believe should apply.
• *Expected sale price or market value – enter the sale price or the market value of the asset (in $AUD) proposing to be sold or disposed of.
• The following fields provides the cost base of the asset to be sold      
  • *Acquisition costs – enter the asset's purchase price
  • Incidental costs of acquisition and expected costs
  • Ownership costs
  • Improvement costs
  • Costs incurred to establish, preserve or defend title.
   

Capital gains tax discount you are entitled to (provide details in an attachment below) – enter the capital gains tax discount you're entitled to because you have held the asset for more than 12 months.

You can find out more about CGT discount for foreign resident individuals.

Note: Be sure to include evidence at section 7 Attachments outlining the reasons for the reduction in the withholding rate and a brief justification as to why it applies.

Main residence exemption

New rules for foreign residents for tax purposes took effect from 9 May 2017. Foreign residents for tax purposes can no longer claim the CGT main residence exemption when they sell property in Australia unless certain circumstances apply.

Foreign residents for tax purposes who already held property on 9 May 2017 can claim the CGT main residence exemption. That is, if the CGT event (disposal) of the property occurred on or before 30 June 2020.

As such, only eligible foreign residents for tax purposes can use the CGT main residence exemption as a reason for applying for a variation.

Applications by foreign residents for tax purposes who have requested variations of the withholding amount on the basis that they are disposing of their main residence will be subject to increased scrutiny, particularly if they have never been an Australian resident for tax purposes.

If a person has always been a foreign resident for tax purposes, it is unlikely they have ever resided in the property as their main residence or meet the requirements for the CGT main residence exemption.

You can find out more about Foreign residents and main residence exemption.

Supporting information

The following information will help you understand what we will look for in support of your variation application.

For a main residence exemption, we need you to provide us with:

• the period (or periods) that you, your spouse or your minor children were actually living at the property, and supporting evidence
• the reasons you believe the property was your main residence
• evidence that you moved to it at settlement or as soon as practicable afterwards
• your intention when purchasing the property, and whether this intention had changed at any stage throughout your ownership of the property
• the contract date for your purchase of the property
• your residency status at the contract date for the sale of the property
• the periods you are claiming the property as your main residence under the absence provisions
• details about where you lived during the period if you are claiming the main residence exemption under the absence provisions
• details of any other property owned by yourself or your spouse in Australia and overseas during the period you are claiming the main residence exemption.

If your variation request:

• involves transactions with related parties in any way, explain why the market value substitution rules would not apply or provide the valuations used in your calculations
• is based on a market value of the property at a particular date, we need a copy of the valuation and the valuation report to consider your application. The report should include      
  • an explanation of the method used
  • the reason that particular method was chosen
  • the qualifications and experience of the valuer
   
• is based on a rollover we need you to detail the rollover provision(s) being used and to set out how you meet every legislative requirement to qualify for the rollover(s). If you have the supporting documents, supply them with a signed statement that the requirements will be met
• involves carry forward losses and      
  • they are used to determine the withholding amount, we will need to see evidence and a statement signed by the vendor saying that after the end of the current financial year they      
    • will still have sufficient capital losses and revenue losses or both carried forward to offset the capital gain they will make on the sale of the property as claimed in the variation request
    • are not aware of any other potential transactions during the current financial year that would change this position
     
  • the vendor has lodged their previous years' tax returns and CGT schedules, these carry forward losses should already be recorded so that they can refer to them
  • there is a revenue loss, we would also want to see at least the yearto-date accounts (for example the management accounts) showing the expected position for the full income year to confirm that the revenue losses would be available to offset any capital gains
   
• is based on the cost base of the property, we will require a detailed calculation of the cost base.

The following options are presented at the end of the variation details section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Next – proceed to the attachments section of the form.

7. Attachments

You can electronically attach any documents you believe support your application to receive a reduced withholding rate below the 12.5% rate. You can attach more than one file. Each file must be in .doc, .pdf or .gif format.

The following options are presented at the end of the attachments section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Next – proceed to the Declaration section of the form.

8. Declaration

*Complete the declaration section of the form.

There are 2 sections of the form to complete:

• *the declaration
• *declare that you are not a robot – this field is required for system operational reasons.

Once the relevant sections have been completed, you should submit the form.

The following options are presented at the end of the Declaration section:

• Back – return to the last screen that had been viewed
• Print friendly version – print the details that have been entered into the form
• Submit – proceed to submit the form.

9. Confirmation screen

The confirmation screen confirms your foreign resident withholding rate variation application was successfully submitted.

You should retain a copy of the form. Do this by selecting 'Print friendly version' to save or print the application.

You will require your form confirmation number if you need to contact us regarding this form.

What happens next

We will process the application and notify you of the outcome. If required, we may contact you to resolve or clarify information, to ensure the application can be processed.

If we issue you a variation notice, you must provide the purchaser with a copy of the notice on or before settlement.

Guidance on completing the Foreign resident capital gains vendor variation application online form.