As part of the 2012-13 Budget, the Federal Government announced it proposes to remove the 50% capital gains tax discount for non-residents on certain capital gains accrued after 7.30 pm (AEST) on 8 May 2012. As a result, non-residents who own taxable Australian real property or mining assets will have any capital gains accruing from that property after that time included in assessable income at 100%. Certain assets, like shares in listed public companies, will not be affected as non-residents currently do not receive any capital gains tax discount for the sale of those assets.
While the Federal Parliament has not passed or even drafted the legislation for the proposal, we recommend a non-resident obtain a market valuation of the applicable asset as at 8 May 2012 from a valuer. A non-resident who is considering investing in Australia should take this proposal into consideration. We will provide a further update once an exposure draft of the legislation is available.