Non-Resident Tax Issues

For Australian income tax purposes, a non-resident is generally only assessable on income arising from sources in Australia. Gains arising from the sale of an interest in Australian real property is regarded as having a source in Australia. In addition, gains arising from the sale of interests in a company or trust that has assets being Australian real property interests is also regarded as having a source in Australia where those real property interests represent more than 50% of the market value of the underlying assets ('land rich' entities).

The CGT Reforms will also result in assessable Australian capital gains arising on the sale of non-resident entities being taxable in Australia where those entities (on a trace through basis) are land rich in Australia. Existing interests will transition into the Australian tax net with a cost base equal to market value on 10 May 2005.