Shares, ETFs and Managed Funds After Departure: Australian CGT and Record-Keeping

An expatriate investment portfolio can generate several different Australian tax outcomes: distributions before and after residency changes, CGT event I1 on departure, non-resident withholding, later disposals and managed-fund cost-base adjustments.

Each holding should be traced through the residency date rather than treating the portfolio as one balance.

Departure classification

Ordinary portfolio shares and fund units are often not taxable Australian property, although land-rich interests and assets of an Australian permanent establishment can be. If they are not taxable Australian property, CGT event I1 can apply on cessation of residency.

The taxpayer can generally choose to disregard I1, which keeps the affected assets within the Australian CGT net until a later event or return to residency.

Distributions and withholding

Australian company dividends, ETF distributions and managed-fund distributions have different components. Franking credits, unfranked amounts, capital gains, foreign income and non-resident withholding should be read from the annual tax statement and residency period.

A cash distribution is not always equal to taxable income. AMIT attribution can differ from cash paid.

AMIT cost-base adjustments

An AMIT member can receive upward or downward cost-base adjustments based on the difference between attributed tax components and cash distributions or related amounts. These adjustments accumulate and affect the gain on disposal.

Ignoring annual AMMA statements can materially misstate cost base. Retain every statement, even for years in which no Australian return was required.

Sales after departure

If I1 was recognised, the post-departure disposal of an ordinary portfolio asset may fall outside Australian CGT, subject to taxable Australian property rules. If the I1 choice was made, Australia may tax the later gain.

The foreign country may use a different cost base, including original cost or market value on arrival. Dual records may be necessary.

Corporate actions

Share splits, demergers, returns of capital, takeovers, rights and reinvestment plans can alter quantity and cost base. Broker transaction history often omits the tax adjustments.

Practical takeaway

Keep a holding-level schedule showing acquisition parcels, corporate actions, annual tax and AMIT statements, residency date value, I1 treatment and foreign-country basis.

Official sources and further reading

• Australian Taxation Office: How changing residency affects CGT
• Australian Taxation Office: Taxable Australian property
• Australian Taxation Office: Exchange traded funds
• Australian Taxation Office: Cost-base adjustments for AMIT members
• Australian Taxation Office: Interest, unfranked dividends and royalties

CGT