Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p10
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 10/11)
Character Range: 7546709–7549592

and
 (b) to the extent that the remuneration is subject to taxation in relation to that income year under a *foreign law.

Division 855—Capital gains and foreign residents

Table of Subdivisions
 Guide to Division 855
855‑A Disregarding a capital gain or loss by foreign residents
855‑B Becoming an Australian resident

Guide to Division 855

855‑1  What this Division is about

      A foreign resident can disregard a capital gain or loss unless the relevant CGT asset is a direct or indirect interest in Australian real property, or relates to a business carried on by the foreign resident through a permanent establishment in Australia.
      Special rules apply for individuals who were Australian residents but have become foreign residents (see also Subdivision 104‑I) and for foreign resident beneficiaries of fixed trusts.
      There are also rules dealing with what happens when a foreign resident becomes an Australian resident.

Subdivision 855‑A—Disregarding a capital gain or loss by foreign residents

Table of sections
855‑5 Objects of this Subdivision
855‑10 Disregarding a capital gain or loss from CGT events
855‑15 When an asset is taxable Australian property
855‑16 Meaning of permanent establishment article
855‑20 Taxable Australian real property
855‑25 Indirect Australian real property interests
855‑30 Principal asset test
855‑32 Disregard market value of duplicated non‑TARP assets
855‑35 Reducing a capital gain or loss from a business asset—Australian permanent establishments
855‑40 Capital gains and losses of foreign residents through fixed trusts

855‑5  Objects of this Subdivision
 (1) The objects of this Subdivision are to improve:
 (a) Australia's status as an attractive place for business and investment; and
 (b) the integrity of Australia's capital gains tax base.
 (2) This is achieved by:
 (a) aligning Australia's tax laws with international practice; and
 (b) ensuring interests in an entity remain subject to Australia's capital gains tax laws if the entity's underlying value is principally derived from Australian real property.

855‑10  Disregarding a capital gain or loss from CGT events
 (1) Disregard a *capital gain or *capital loss from a *CGT event if:
 (a) you are a foreign resident, or the trustee of a *foreign trust for CGT purposes, just before the CGT event happens; and
 (b) the CGT event happens in relation to a *CGT asset that is not *taxable Australian property.
Note: A capital gain or capital loss from a CGT asset you have used at any time in carrying on a business through a permanent establishment in Australia may be reduced under section 855‑35.
 (2) The *CGT asset in relation to which a *CGT event happens includes the following:
 (a) for CGT event D1 (about creating contractual or other rights)—the CGT asset that is the subject of the creation of the contractual or other rights;
Example: You grant an