{"id":"F2017L00992","name":"Taxation Administration (Remedial Power—Foreign Resident Capital Gains Withholding) Determination 2017","slug":"taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":96893,"registerId":"commonwealth-F2017L00992-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1. Name of determination","sectionType":"part","heading":"1. Name of determination","content":"## 1. Name of determination\n\nThis determination is the Taxation Administration (Remedial Power—Foreign Resident Capital Gains Withholding) Determination 2017.","sortOrder":0},{"sectionNumber":"2. Commencement","sectionType":"part","heading":"2. Commencement","content":"## 2. Commencement\n\nEach provision of this determination specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

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Column 2

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Date/Details

1. The whole of this determination

The first day this determination is no longer liable to be disallowed, or to be taken to have been disallowed, under section 42 of the Legislation Act 2003.

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\nAny information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.","sortOrder":1},{"sectionNumber":"3. Authority","sectionType":"part","heading":"3. Authority","content":"## 3. Authority\n\nThis determination is made under section 370\\-5 of Schedule 1 to the Taxation Administration Act 1953.","sortOrder":2},{"sectionNumber":"4. Modifications","sectionType":"part","heading":"4. Modifications","content":"## 4. Modifications\n\nEach modification of the operation of a provision of a taxation law as set out in a Schedule to this determination is determined for the purposes of section 370\\-5 of Schedule 1 to the Taxation Administration Act 1953.","sortOrder":3},{"sectionNumber":"Schedule 1","sectionType":"part","heading":"Modifications","content":"Legislative Instrument\n\nTaxation Administration (Remedial Power—Foreign Resident Capital Gains Withholding) Determination 2017\n\nI, Andrew England, Deputy Commissioner, Australian Taxation Office, make this determination under section 370-5 of Schedule 1 to the Taxation Administration Act 1953.\n\nAndrew England\n\nDeputy Commissioner Policy, Analysis and Legislation\n\nAustralian Taxation Office\n\nDated: 31/07/2017\n\n## 1. Name of determination\n\nThis determination is the Taxation Administration (Remedial Power—Foreign Resident Capital Gains Withholding) Determination 2017.\n\n## 2. Commencement\n\nEach provision of this determination specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. The whole of this determination

The first day this determination is no longer liable to be disallowed, or to be taken to have been disallowed, under section 42 of the Legislation Act 2003.

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\nAny information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n## 3. Authority\n\nThis determination is made under section 370\\-5 of Schedule 1 to the Taxation Administration Act 1953.\n\n## 4. Modifications\n\nEach modification of the operation of a provision of a taxation law as set out in a Schedule to this determination is determined for the purposes of section 370\\-5 of Schedule 1 to the Taxation Administration Act 1953.\n\n## Schedule 1—Modifications\n\n## 1. Tax credit for recipient of withholding payments involving foreign residents and taxable Australian property\n\n(1) The operation of:\n\n(a) sections 18-15, 18-20 and 18-25 of Schedule 1 to the Taxation Administration Act 1953; and\n\n(b) any other provision of a taxation law the operation of which is affected by the operation of any of those sections;\n\nis modified in the way set out below.\n\n### Modification\n\n(2) To the extent that an entity’s entitlement to a credit referred to in section 18\\-15, 18\\-20 or 18\\-25 in that Schedule is in respect of an amount paid to the Commissioner under Subdivision 14\\-D in that Schedule, treat the entitlement as arising in the income year in which the transaction causing that application of Subdivision 14\\-D is recognised for income tax purposes for the entity.\n\n(3) The modification applies in respect of transactions entered into on or after 1 July 2016.","sortOrder":4},{"sectionNumber":"1. Tax credit for recipient of withholdi","sectionType":"part","heading":"1. Tax credit for recipient of withholding payments involving foreign residents and taxable Australian property","content":"## 1. Tax credit for recipient of withholding payments involving foreign residents and taxable Australian property\n\n(1) The operation of:\n\n(a) sections 18-15, 18-20 and 18-25 of Schedule 1 to the Taxation Administration Act 1953; and\n\n(b) any other provision of a taxation law the operation of which is affected by the operation of any of those sections;\n\nis modified in the way set out below.","sortOrder":5},{"sectionNumber":"Modification","sectionType":"division","heading":"Modification","content":"### Modification\n\n(2) To the extent that an entity’s entitlement to a credit referred to in section 18\\-15, 18\\-20 or 18\\-25 in that Schedule is in respect of an amount paid to the Commissioner under Subdivision 14\\-D in that Schedule, treat the entitlement as arising in the income year in which the transaction causing that application of Subdivision 14\\-D is recognised for income tax purposes for the entity.\n\n(3) The modification applies in respect of transactions entered into on or after 1 July 2016.","sortOrder":6}],"analysis":{"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"This determination is narrowly remedial. It does not expand the range of taxpayers subject to Subdivision 14-D, nor does it change the amount of credits available. It only changes the timing rule for when an existing credit is treated as arising (aligning it with the income tax recognition of the underlying transaction). Therefore the scope of the underlying laws is not materially enlarged beyond their original purpose; the instrument corrects timing operation rather than altering substantive coverage."},"complexity_factors":["Short instrument (single remedial determination, few pages)","One substantive modification: timing of credit recognition","Cross-references to multiple provisions: sections 18-15, 18-20, 18-25 and Subdivision 14-D","Retrospective application to transactions from 1 July 2016 (requires historic review)","Relies on interpretation of 'recognised for income tax purposes' which can involve accounting and tax timing rules"],"plain_english_summary":"**What this instrument does (mechanically)\n\n- This is a remedial determination made by the Australian Taxation Office under section 370-5 of Schedule 1 to the Taxation Administration Act 1953. It modifies how certain tax credit rules operate for amounts paid to the Commissioner of Taxation under Subdivision 14‑D (the foreign resident capital gains withholding regime).\n\n- Concretely, where an entity’s entitlement to a credit under section 18‑15, 18‑20 or 18‑25 of Schedule 1 is because of an amount paid to the Commissioner under Subdivision 14‑D, the instrument treats that credit as arising in the income year in which the transaction that caused Subdivision 14‑D to apply is recognised for income tax purposes by the entity. (In short: the timing of the credit follows the timing of the underlying transaction for income tax.)\n\n- The modification applies to transactions entered into on or after 1 July 2016.\n\nWho this affects\n\n- Entities (taxpayers) that receive a tax credit tied to an amount paid to the Commissioner under the foreign resident capital gains withholding rules (Subdivision 14‑D).\n- Practitioners, tax administrators and payers who deal with the withholding and reporting obligations under Subdivision 14‑D.\n\nWhy it matters\n\n- The change aligns the timing of a tax credit with the year in which the underlying capital gains (or other taxable effects) are recognised for income tax purposes, rather than with the year the withheld amount is physically remitted to the Commissioner. That alignment removes a timing mismatch between withholding events and tax recognition for affected taxpayers.\n\nOfficial purpose claim and practical test\n\n- The instrument is presented as a remedial fix (authority: section 370‑5 of Schedule 1 to the Taxation Administration Act 1953) to correct the operation of sections 18‑15, 18‑20 and 18‑25 where those credits arise from payments under Subdivision 14‑D.\n\n- Testing that claim against practical effects:\n - Implementation cost/risk: Low for the ATO (it is an administrative determination) but may impose work on affected taxpayers and their advisers who must ensure credits are reported in the income year that matches their income tax recognition. That can mean amending returns or adjusting accounting treatments for earlier years back to 1 July 2016 where necessary.\n - Compliance burden: Concentrated on taxpayers who previously claimed or expected to claim credits in a different year than their income tax recognition. Taxpayers must review historic transactions from 1 July 2016 onward.\n - Discretion and legal effect: The instrument uses a statutory remedial power and does not create a new substantive tax — it changes timing only. The ATO made the timing determination under an express power, so administrative discretion is limited to that statutory remedial scope (see section 370‑5).\n - Effects on private choice and markets: The substantive tax outcome (the amount of credit available) is not altered by this instrument; only the year in which the credit is treated as arising is altered. This may affect cash‑flow timing for those who claimed credits in an earlier or later year, and could require tax return amendments.\n - Opportunity costs and substitution: Taxpayers may incur adviser fees or accounting adjustments; there is no change to the underlying withholding mechanics of Subdivision 14‑D.\n\nWho pays, who decides, and what behaviour changes\n\n- Who pays: The underlying withholding remains payable under Subdivision 14‑D as before; this instrument does not create a new payment obligation. The ‘who pays’ question remains the same under Subdivision 14‑D, but recipients of credits must claim them in the specified income year.\n- Who decides: The ATO (Deputy Commissioner) exercised authority under section 370‑5 to set the timing rule in this determination.\n- Behaviour changes: Affected taxpayers must align their credit claims with the year their underlying transaction is recognised for income tax, potentially amending prior returns or altering accounting treatment for transactions from 1 July 2016 onwards.\n\nKey statutory references\n\n- Authority: section 370‑5 of Schedule 1 to the Taxation Administration Act 1953.\n- Modified provisions: sections 18‑15, 18‑20 and 18‑25 of Schedule 1 to the Taxation Administration Act 1953 (and any related provisions affected by those sections).\n- Withholding regime referenced: Subdivision 14‑D of Schedule 1 (foreign resident capital gains withholding).\n- Application date: transactions entered into on or after 1 July 2016.\n\nPractical note\n\n- This is a narrow, timing‑focused remedial determination. It does not change entitlement to credits in quantum; it changes when those entitlements are treated as arising for tax years. Affected taxpayers and their advisers should check historic transactions on or after 1 July 2016 to ensure credits have been claimed in the correct year. If earlier tax returns recorded the credit in a different year, those returns may need review or amendment.\n"},"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"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This determination operates exactly within its intended scope. It uses the Commissioner's remedial power under section 370-5 of the Taxation Administration Act 1953 to make a targeted, technical fix to a specific timing issue in the foreign resident capital gains withholding regime. The modification is narrow, applies only to the identified problem, and does not expand beyond the original policy intent of ensuring proper tax credit timing."},"complexity_factors":["Relies on understanding of Subdivision 14-D of Schedule 1 to the Taxation Administration Act 1953 (foreign resident capital gains withholding regime)","Cross-references three specific sections (18-15, 18-20, 18-25) without reproducing their text","Uses technical tax concepts: 'recognised for income tax purposes', 'income year', 'tax credit', 'withholding payments'","Conditional application limited to transactions on or after 1 July 2016","Operates as a 'modification' under the Commissioner's remedial power (section 370-5), which is itself a complex administrative mechanism","Commencement tied to disallowance period under the Legislation Act 2003, creating procedural complexity"],"plain_english_summary":"This determination fixes a timing mismatch in Australia’s foreign resident capital gains withholding: the 12.5% amount withheld on sale of certain Australian property will be recognised as a tax credit in the same income year the transaction is recognised for income tax purposes, not necessarily the year the withholding occurred. \n\nIt affects foreign sellers of taxable Australian property, buyers required to withhold and remit to the ATO, and certain Australian residents; it applies to transactions entered into on or after 1 July 2016."}},"importantCases":[],"_links":{"self":"/api/acts/taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017","history":"/api/acts/taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017/history","analysis":"/api/acts/taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017/analysis","conflicts":"/api/acts/taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017/conflicts","importantCases":"/api/acts/taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017/important-cases","documents":"/api/acts/taxation-administration-remedial-power-foreign-resident-capital-gains-withholding-determination-2017/documents"}}