As part of the 2017-2018 Federal Budget in May 2017, the Federal Government announced that they would be legislating to deny the main residence capital gains tax exemption for Foreign and Temporary residents.
Hanrick Curran’s Budget tax brief based on the Budget announcement correctly commented that many New Zealand citizens living in Australia could be affected as they can be considered temporary residents for Australian tax purposes.
In July, exposure draft legislation about these measures was released for comment. The Treasury has significantly detracted from the original announcement by only removing the exemption for Foreign Residents.
We are aware that New Zealand citizen interest groups did lobby the Government to try to ensure they would not be adversely affected by the proposed changes. It seems the lobbying was successful because Temporary Residents are not mentioned in the draft Bill. Further, the Explanatory Memorandum to the exposure draft specifically contains an example showing that a New Zealand citizen living in Australia under a special purpose visa (and considered a Temporary Resident) should not be affected because the draft legislation only affects foreign residents.
While final submissions about the Bill have closed, it has not yet been introduced to Parliament.
Hanrick Curran has provided advice and assistance to many New Zealand citizens living in Australia about the application of the Temporary Resident tax rules and the potential tax savings this may bring. Should you have any question about how this will affect your business, please contact your usual Hanrick Curran advisor or alternatively Jamie Towers on 07 3218 3900.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.