{"id":"F2020L01291","name":"PAYG Withholding variation for foreign resident capital gains withholding payments – no residue after a mortgagee exercises a power of sale 2020","slug":"payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":130514,"registerId":"commonwealth-F2020L01291-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1. Name of instrument","sectionType":"part","heading":"1. Name of instrument","content":"## 1. Name of instrument\n\nThis determination is the PAYG Withholding variation for foreign resident capital gains withholding payments – no residue after a mortgagee exercises a power of sale 2020.","sortOrder":0},{"sectionNumber":"2. Commencement","sectionType":"part","heading":"2. Commencement","content":"## 2. Commencement\n\nThis instrument commences on the day after its registration on the Federal Register of Legislation.","sortOrder":1},{"sectionNumber":"3. Application","sectionType":"part","heading":"3. Application","content":"## 3. Application\n\nThis instrument applies to payments covered by section 14-200 of Schedule 1 to the Taxation Administration Act 1953, where, in a transaction involving the acquisition of land:\n\n(i) a mortgagee exercises a power of sale;\n\n(ii) the residue is zero or less than zero; and\n\n(iii) the mortgagee provides a written declaration to the transferee that the amount to withhold is varied to nil under this instrument.","sortOrder":2},{"sectionNumber":"4. Determination","sectionType":"part","heading":"4. Determination","content":"## 4. Determination\n\nThe amount to be paid by the transferee to the Commissioner in relation to the transactions covered by this instrument is varied to nil.","sortOrder":3},{"sectionNumber":"5. Definitions","sectionType":"part","heading":"5. Definitions","content":"## 5. Definitions\n\nMortgagee – a mortgagee in relation to the land that is also an ‘authorised deposit-taking institution’ as defined in section 5 of the Banking Act 1959.\n\nResidue – an amount worked out as the sale proceeds less expenses incidental to the sale and amounts payable to registered mortgagees over the asset.\n\nTransferee – the person acquiring the land as a result of the transaction.\n\nOther terms used in this legislative instrument have the same meaning as defined in the Taxation Administration Act 1953.","sortOrder":4},{"sectionNumber":"6. Repeals","sectionType":"part","heading":"6. Repeals","content":"## 6. Repeals\n\nNone.","sortOrder":5}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This instrument maintains a narrow, targeted scope consistent with its purpose. It addresses a specific gap in the foreign resident capital gains withholding regime where mortgagee sales with no residue would otherwise create impossible compliance obligations. The scope has not expanded beyond this discrete technical fix."},"complexity_factors":["Very short instrument — only 6 sections covering 2 pages","Only 3 defined terms, all with straightforward definitions","Single, clear condition for application (three cumulative requirements in section 3)","No cross-references to other legislation beyond the foundational Taxation Administration Act 1953 and Banking Act 1959","No exceptions, exemptions, or nested conditional logic","Determination itself is a simple nil variation with no calculations or alternative rates"],"plain_english_summary":"This instrument carves out a narrow exception to the 12.5% PAYG withholding that normally applies when Australian land is bought from a foreign resident. If a mortgagee (bank) has sold repossessed property, there’s no net proceeds after the bank’s claim, and the bank gives a written declaration, the transferee need not withhold.\n\nIt mainly affects buyers of mortgagee sales, banks/ADIs selling repossessed property, and avoids forcing buyers to withhold non‑existent funds."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":true,"description":"This instrument narrows the operation of the default foreign resident capital gains withholding rule (s14‑200) by specifying that, in transactions where an ADI mortgagee sells under a power of sale and the calculated residue is zero or less, the amount payable by the transferee to the Commissioner is varied to nil, provided the mortgagee gives a written declaration (application: s3; determination: s4; definitions: s5). It therefore creates a limited exemption from the general withholding obligation rather than altering the broader regime."},"complexity_factors":["Narrow factual trigger: applies only when a mortgagee exercises a power of sale and the residue is zero or less (application: s3).","Eligibility limited to mortgagees that are authorised deposit‑taking institutions, adding a definitional constraint (definitions: s5).","Reliance on a written declaration from the mortgagee to the transferee to vary withholding to nil, creating an administrative reliance point (application: s3).","Direct variation of the amount payable to the Commissioner to nil — a binary legal effect but dependent on meeting the factual and documentary tests (determination: s4).","Interaction with existing withholding regime under section 14‑200 of the Taxation Administration Act 1953 — this instrument does not repeal that regime, it creates a specific exception (application: s3; definitions: s5).","Calculation of 'residue' depends on sale proceeds less sale expenses and amounts payable to registered mortgagees, which may require factual and accounting determinations in each case (definitions: s5).","Immediate commencement mechanism (the day after registration) concentrates timing and implementation considerations (commencement: s2)."],"plain_english_summary":"This instrument sets PAYG withholding under s14‑200 to nil where an authorised deposit‑taking mortgagee exercises a power of sale, the sale produces zero or negative residue, and the mortgagee gives the transferee a written declaration varying withholding to nil. It affects authorised deposit‑taking institutions (mortgagees), transferees (buyers) and the ATO’s withholding collection by removing the buyer’s withholding obligation in this narrowly defined situation."}},"importantCases":[],"_links":{"self":"/api/acts/payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-","history":"/api/acts/payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-/history","analysis":"/api/acts/payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-/analysis","conflicts":"/api/acts/payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-/conflicts","importantCases":"/api/acts/payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-/important-cases","documents":"/api/acts/payg-withholding-variation-for-foreign-resident-capital-gains-withholding-payments-no-residue-after-/documents"}}