Investors not residing in Australia can also be distributed or attributed with income and capital gains from Australian resident companies like ExtrasJar. Given this, Australian tax will be deducted from them and may also be subject to tax in the country they reside in. But, they may be entitled to a credit for some or all of the tax deducted in Australia.
Broadly, a non-resident investor in the ExtrasJar fund (Fund) will be subject to income tax on any capital gains made on the disposal of units if they, together with any associates, hold or had an option or right to hold 10% or more of the units in the Fund at the time of disposal or throughout a period of twelve (12) months during the two years prior to disposal and the majority of the Fund’s assets comprise, directly or indirectly, taxable Australian real property. In this regard, it is not expected that the Fund will hold taxable Australian real property.
A non-resident may also be subject to income tax on any capital gains made where the units in the Fund have been held as part of carrying on a business through a permanent establishment in Australia.
However, if the non-resident holds their units as part of an investing business or for the purpose of profit-making by sale, gains may be subject to Australian tax as ordinary income, subject to any treaty relief.
We strongly recommend that non-resident investors consult their tax adviser regarding their tax implications, including the tax implications in the country in which they are resident for tax purposes.