Ceasing to be an Australian resident

If you go overseas and cease to be an Australian resident, you are taken to have disposed of certain assets for their market value at the time you cease being an Australian resident.
If you ceased being an Australian resident:

• before 12 December 2006, you are taken to have disposed of each of your assets that did not have the necessary connection with Australia – for their market value at the time you ceased being a resident, and
• on or after 12 December 2006, you are taken to have disposed of each of your assets that are not taxable Australian property – for their market value at the time you ceased being a resident. In the case of indirect Australian real property interests and options or rights to acquire such interests, you are also taken to have immediately re-acquired these assets for their market value.

Exemption for a temporary resident who ceases being an Australian resident
There is an exception for temporary residents. If you are a temporary resident when you cease to be an Australian resident, you are not taken to have disposed of any of your assets.
Exemption for a short-term resident who ceases being an Australian resident
If you are an individual who was in Australia on 6 April 2006 and have remained here as an Australian resident since that date, an exemption applies if you satisfy certain conditions. You disregard any capital gain or capital loss if you were an Australian resident for less than five years during the 10 years before you stopped being one, and either:

• owned the asset before last becoming an Australian resident, or
• inherited the asset after last becoming an Australian resident.

Choosing to disregard capital gains and capital losses when you cease being an Australian resident
If you are an individual, you may choose to disregard all capital gains and capital losses you made when you stopped being a resident.
If you ceased being a resident before 12 December 2006 and you make this choice, those assets are taken to have the necessary connection with Australia until the earlier of:

• a CGT event happening to the assets (for example, their sale or disposal), or
• you again become an Australian resident.

If you ceased being a resident on or after 12 December 2006 and you make this choice, the assets are taken to be taxable Australian property until the earlier of:

• a CGT event happening to the assets, or
• you again becoming an Australian resident.

The effect of making this choice is that the increase or decrease in the value of the assets from the time you cease being a resident to the time of the next CGT event or you again becoming a resident, is also taken into account in working out your capital gains and capital losses on those assets. The way you prepare your tax return is sufficient evidence of your choice.


Please note the information contained on this website is general in nature and should not be relied upon as tax advice. If you have a question please contact Sean Urquhart on 02 8264 0755.