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Foreign residents and the main residence exemption no more


It can be quite an adventure to live and work overseas for a time, should the opportunity arise. Many who have done so choose to keep their home in Australia because they can maintain the main residence exemption from capital gains tax. However, not anymore. In fact, not ever. Following the 2017-18 Budget announcement, the CGT provisions were amended with effect from 9 May 2017 to abolish the main residence exemption for foreign residents. While there is no grandfathering for existing properties, there is a limited transitional period during which the exemption may still be available. This article examines the technical features of the amendments, the practical consequences, and the tough decision many expats will need to make very soon. In addition, the article sets out how practitioners can help their affected clients make that decision.

Author profile

David Montani CTA
David is Nexia Australia’s National Tax Director, providing tax technical and strategic support to Nexia offices across Australia. Prior to commencing this role in 2019, David had 26 years of experience in taxation and business advisory, with the last 15 years in specialist taxation consulting, leading Nexia Perth's Tax Consulting Division. Particular areas of specialty include business restructures, property transactions, Capital Gains Tax, Division 7A and business sales. David's approach is to deliver solutions-based outcomes that assist clients in making important decisions concerning their businesses. - Current at 22 October 2020
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