Capital Gains on Overseas Assets
If you are an Australian resident, your capital gains on overseas assets are treated in the same way as your capital gains on Australian goods. If you make a capital gain that is taxable in Australia and you have paid foreign tax on it, you may be entitled to a foreign income tax offset.
If you operate an Australian company, from 1 April 2004 certain capital gains and capital losses you make on the disposal of your shares in foreign companies with underlying active businesses are disregarded or reduced
As an Australian resident, you are generally taxed on any capital gains you make on overseas assets – for example, when you sell an overseas property. You must report the gain in your tax return.
If the gain is payable in Australia and you’ve paid foreign tax on it, you may be entitled to a foreign income tax offset.
Limits to debt deductions for thinly capitalized entities
If you operate a thinly capitalized or highly geared entity – that is, your assets are funded by a high level of debt and relatively little equity – special rules apply that limit your debt deductions if you function either of the following:
- an Australian entity with overseas investments
- a foreign entity with investments in Australia.
For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au
