Ask Ban Tacs Question
Hello,
I would like to come back to my question on Friday 29 Sept and your response #846 about my situation for capital gain tax clearance for non-resident for tax purpose.
Is there any guarantee that I can claim back the whole amount from the 12,5% selling value withheld or I can only claim part of it? On what background will ATO determine that I can claim back the whole amount? Do I need to provide any proof of expenses to be able to claim this 12.5% of selling value? such as agent fee, solicitor fee, marketing fees, etc.. I still have all receipt and invoices of the expenses spent on renovating the house after purchasing in 2012. Please advise if these could help.
The final option would be: if I delay the selling of the property, come back to Australia to live and log my income tax return this year although I have not made any income in Australia (from what I remember the due date for income tax return is 31 Oct), will I be eligible as resident for tax purpose? And hence eligible for capital gain tax clearance certificate? because ATO will then have the record that I have done my tax return. Please advise.
Answer
You do not have to answer the part of section E regarding the capital gains tax calculation you only have to tick the main residence exemption box and vary the rate to zero. You still don’t technically get a clearance certificate because you are a non resident you can’t, but with the withholding tax varied to zero you get the result you need, no tax withheld.
If you complete this form there will be no 12.5% withheld to claim back. From what you have told me the property is fully covered by your main residence exemption the whole time you owned it. You can continue to cover it with your main residence exemption while you are living overseas and you are not limited to 6 years because it is not earning income. What you have to be careful about is not selling after 30th June 2019 if you are still a non resident then the whole capital gain for the whole time you owned it will be taxed.
You do not have to prove any costs associated with the property because that is not the basis of your variation. They may contact you regarding the main residence exemption but if that property is the last address they have on you in Australia then I doubt there will be any problems.
To become a resident of Australia for tax purposes again you would have to genuinely return is settle here and start working here. But you don’t need to do that anyway.
My advice is fill in the form as I instructed in the previous answer and let me know if you have any problems.
