Residency for tax purpose – Part 2
Medicare Levy
Medicare gives Australian residents access to health care. It is partly funded by taxpayers who pay a Medicare levy of 2% of their taxable income.
If you were a foreign resident:
- for the full year – you can claim a full exemption for the Medicare levy
- for only part of the year – you can claim a full exemption for that period if
- you did not have any dependentsfor that period, or
- all your dependents were in an exemption category for that period.
Capital Gain Tax
CGT Discount
Up to 8 May 2012, the CGT discount of 50% was available to foreign resident individuals who were subject to CGT on taxable Australian property.
For assets acquired after 8 May 2012, the discount is generally not available to foreign and temporary resident individuals (including beneficiaries of trusts and partners in a partnership).
The discount is apportioned where a CGT event happens after 8 May 2012 and:
- you acquired the asset before that date, or
- you had a period of Australian residency after that date.
CGT events that occurred before 8 May 2012 are not affected.
You must calculate the CGT discount you can apply to the capital gain if you’re a foreign or temporary resident individual and, after 8 May 2012, you have a discount capital gain from a CGT event.
If you were a foreign or temporary resident on 8 May 2012, you may choose to get a market value for the CGT asset as at 8 May 2012 and use a market value calculation. This will apportion the CGT discount to take into account the capital gain you accrued before 8 May 2012.
Australian residents with a period of foreign residency after 8 May 2012, you must calculate the CGT discount you can apply to the capital gain you have if you are an Australian resident and, after 8 May 2012, you have:
- a capital gain from a CGT event
- a period of foreign or temporary residency
Your period of foreign or temporary residency after 8 May 2012 is taken into account when calculating the CGT discount you can apply.
Foreign resident capital gains withholding payments
Foreign resident capital gains withholding applies to vendors disposing of certain taxable Australian property under contracts that are entered into on or after 1 July 2017.
A 12.5% non-final withholding was applied to these transactions at settlement.
The assets subject to the withholding tax are:
- taxable Australian real property with a market value of $750,000 or more
- an indirect Australian real property interest
an option or right to acquire such property or interest.
