Law Companion Ruling LCR 2016/7A3

What this ruling is about: Omit the preamble; substitute: 2. Table of Contents Omit 'Put & call'; substitute 'Put and call'. 3. Paragraph 1 Omit footnote 1. 4. Paragraph 2 (a) Omit the wording of the paragraph (excluding the footnotes); substitute: (b) After the paragraph, insert new paragraph 2A: 5. Paragraph 3 (a) Omit the wording of the paragraph; substitute: (b) After 'relevant foreign resident', insert new footnote 3A: (c) Omit footnote 4. 6. Paragraph 6 (a) Omit 'If the withholding obligation arises from a transaction entered into on or after 1 July 2017, the purchaser must withhold from the vendor, and pay to the Commissioner, an amount equal to 12.5% of'; substitute 'If the withholding obligation arises from a transaction entered into on or after 1 January 2025, the purchaser must withhold from the vendor, and pay to the Commissioner, an amount equal to 15% (with no threshold applied) 7A of'. (b) After '(with no threshold applied)', insert new footnote 7A: 7. Paragraph 6A (a) Omit the wording of the paragraph; substitute: (b) After the paragraph, insert new paragraph 6B: (c) At the end of new paragraph 6B, insert new footnote 8A: 8. Paragraph 8 (a) Omit all occurrences of '12.5%'; substitute '15%'. (b) In footnote 10, omit '1 July 2017'; substitute '1 January 2025'. 9. Paragraph 12 (a) Omit the wording of the paragraph (excluding footnotes); substitute: (b) Omit the wording of footnote 13; substitute: (c) Omit footnote 13A. (d) In footnote 14, omit '1 July 2017'; substitute '1 January 2025'. 10. Paragraph 13 Omit '12.5%'; substitute '15%'. 11. Paragraph 15A Omit the wording of the paragraph; substitute: 12. Paragraph 15B Omit the wording of the paragraph; substitute: 13. Paragraph 15C Omit the wording of the paragraph; substitute: 14. Paragraph 16 Omit the wording of footnote 19; substitute: 15. Paragraph 21 Omit '$30-million'; substitute '$30 million'. 16. Paragraph 26 (a) After 'In March 2018', insert a comma. (b) Omit '$750,000', insert 'the $750,000 threshold'. 17. Paragraph 27 After '1 January 2018', insert a comma. 18. Paragraph 30 After 'In October 2018', insert a comma. 19. Paragraph 33 Omit '2018'; substitute '2025'. 20. Paragraph 37 Omit '$1,250 (being $12.5% of $10,000)'; substitute '$1,500 (being $15% of $10,000)'. 21. Paragraph 38 Omit '2017'; substitute '2025,'. 22. Paragraph 41 Omit '$375,000 (being $12.5% of $3 million)'; substitute '$450,000 (being $15% of $3 million)'. 23. Paragraph 42 (a) In the heading, omit '&'; substitute 'and'. (b) Omit '2018'; substitute '2025'. 24. Paragraph 45 Omit '$1,250 (being 12.5% of $10,000)'; substitute '$1,500 (being 15% of $10,000)'. 25. Paragraph 46 Omit '2018'; substitute '2025,'. 26. Paragraph 48 Omit '$92,500 (being 12.5% of $740,000)'; substitute '$111,000 (being 15% of $740,000)'. 27. Paragraph 50 Omit '2018'; substitute '2025'. 28. Paragraph 53 Omit '$1,250 (being 12.5% of $10,000)'; substitute '$1,500 (being 15% of $10,000)'. 29. Paragraph 56 Omit '2018'; substitute '2025'. 30. Paragraph 59 Omit '$1,250 (being 12.5% of $10,000)'; substitute '$1,500 (being 15% of $10,000)'. This Addendum applies from1 January 2025. Commissioner of Taxation 29 July 2026 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).






This Addendum is a public ruling for the purposes of the Taxation Administration Act 1953 . It amends Law Companion Ruling LCR 2016/7 to reflect amendments made by the Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Act 2024 . | LCR 2016/7 is amended as follows: | If this Ruling applies to you, and you correctly rely on it in good faith, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling. | 2A. All legislative references in this Ruling are to Schedule 1 of the Taxation Administration Act 1953, unless otherwise indicated. | 3A Section 14-210 sets out whether the vendor is a foreign resident for the purposes of the withholding obligation. | 7A Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Act 2024. | For transactions entered into on or after 1 July 2016 and before 1 July 2017, the withholding rate was 10% with the withholding threshold of $2 million. | 6B. For transactions entered into on or after 1 July 2017 and before 1 January 2025, the withholding rate increased to 12.5%. 8A | 8A As well as an increase to the withholding rate, the withholding threshold was reduced from $2 million to $750,000: Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Act 2017. | The withholding obligation did not apply to acquisitions of TARP, or indirect Australian real property interests that resulted in company title interests 12 , provided the market value of the asset was below the applicable threshold. 13 Options, however, were not subject to any threshold. A purchaser that paid an option fee to a vendor who was a relevant foreign resident, must withhold, even if the underlying asset had a market value below the applicable threshold (see Example 2 of this Ruling). 14 | If a purchaser acquired an option before 1 January 2025, the purchaser was subject to a withholding rate of 12.5%. However, if the option was acquired on or after 1 January 2025, a withholding rate of 15% will apply to the option's cost base at the time of the acquisition. | If the purchaser subsequently exercised the option before 1 January 2025, a withholding rate of 12.5% will apply to the asset  if the asset is TARP, or indirect Australian real property interests giving rise to company title interests, it only applies where the purchase price is $750,000 or more. | If the purchaser subsequently exercises the option on or after 1 January 2025, a withholding rate of 15% will apply if the asset is TARP, or indirect Australian real property interests giving rise to company title interests, irrespective of the property value. | Refer to Law Companion Ruling LCR 2016/6 Foreign resident capital gains withholding regime: amount payable to the Commissioner . For further guidance on market valuation, refer to Market valuation of assets .