Private ruling: capital gains tax - foreign resident - non-taxable Australian property - shares - capital loss
Published: November 2011
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1:  | A1: 

Relevant facts and circumstances: You are a citizen of an overseas country (Country A) and have never been a resident of Australia for taxation purposes. You went to another overseas country (Country B) for employment and continued working there for a number of years. You were a resident of Country B while you were working there. You and your spouse jointly purchased a number of shares in Company A after 20 September 1985. The headquarters of Company A was located in Australia. You retired from your position in Country B and returned to Country A. Company A was delisted and deregistered, and your shares had no value.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-10 | Income Tax Assessment Act 1997 Section 102-15 | Income Tax Assessment Act 1936 Subsection 160T(1)

Reasons for decision: Detailed Reasoning - Capital gains tax on non-residents: There are special capital gains tax (CGT) rules that apply if you are a non-resident. Unless otherwise specified, 'Australian resident' means a resident of Australia for taxation purposes. For periods when you are a non-resident, only certain assets are subject to CGT. If you are a non-resident, you are subject to CGT if a disposal of a CGT asset that is taxable Australian asset happens. Generally, a disposal of an asset shall be deemed to have been a disposal of a taxable Australian asset if: § The asset comprised of land or a building located in Australia; § The asset has at any time been used by the taxpayer in carrying on a trade or business wholly or partly at or through a permanent establishment in Australia; § The disposed asset comprised of a share, or an interest in a share, in a company, that was a resident of Australia and was a private company in the income year in which the disposal took place; § The asset comprised of a share, or an interest in a share, in a company, was a resident of Australia and was not a private company during the five year period immediately before the disposal of the asset occurring after 19 September 1985 where: o the taxpayer or an associate of the taxpayer was the beneficial owner of; or o any associate of the taxpayer, or the taxpayer and any associate or associates of the taxpayer, together were the beneficial owners of: § not less than 10% of the shares of the company, excluding any shares that carried no right to participate beyond the specified amount in a distribution of either profits or capital In your case, you and your spouse jointly acquired a number of shares in Company A while you were a resident of Country B. The headquarters of Company A was located in Australia. Company A was deregistered and your shares were worthless. As you are a non-resident for taxation purposes, and the shares are not taxable Australian assets, the CGT provisions do not apply to your shares, and you do not have a capital loss to carry forward. Note: Capital losses can be applied to any capital gains that are made in the same income year. Any unapplied net capital losses can be carried forward and applied against any capital gains that have been made during the next income year, and so on, until they have been applied against future capital gains. There is no legislation, or provisions which would enable the Commissioner to exercise his discretion to be able to make a payment of the capital loss amount to a taxpayer.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Subject: capital gains tax - foreign resident - non-taxable Australian property - shares - capital loss: Question: Do you have a carried forward capital loss?