Compliance
Foreign Resident Capital Gains for Shares & Disclosure Rules Changing July 2025
From 1 July 2025, foreign residents disposing of shares or membership interests over A$20 million must notify the ATO, alongside other changes widening non-resident CGT rules. Read how this affects investors abroad.
By NomadicTax Research Team • 5-8 min read • April 14, 2026
## Overview of Proposed Non-Resident CGT Changes
The Australian Government has proposed amendments to **Division 855 of the Income Tax Assessment Act 1997**, aimed at updating and expanding the Capital Gains Tax (CGT) liabilities for foreign residents. These changes were announced recently and are **not yet law**.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-b12d922f-3ffe-47a6-a868-289919bcf50a?utm_source=openai))
### What’s Changing from 1 July 2025
- **Broader asset types**: Greater clarity and expansion of which assets foreign residents are taxed on in Australia.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-b12d922f-3ffe-47a6-a868-289919bcf50a?utm_source=openai))
- **Principal asset test extended**: The period for this test becomes **365 days**, increasing exposure for foreign holders.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-b12d922f-3ffe-47a6-a868-289919bcf50a?utm_source=openai))
- **Notification threshold**: Foreign residents disposing of shares or membership interests worth over **A$20 million** will need to **notify the ATO before executing the sale**.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-b12d922f-3ffe-47a6-a868-289919bcf50a?utm_source=openai))
### Implications for Foreign Investors
- A foreign investor with A$25 million of shares in an Australian entity will need to notify the ATO prior to sale—failure could carry penalties.
- The broadened asset scope may capture indirect interests or membership interests not formerly included.
## Practical Advice for Digital Nomics & Non-Residents
- **Review your portfolio**: Check whether any assets might now fall into scope under the broadened definitions.
- **Plan ahead**: If you're disposing of any shares or membership interests exceeding A$20M, ensure notification in advance.
- **Seek valuations**: Accurate valuation will be essential, especially with the 365-day test.
- **Tax compliance**: Work with advisors to understand whether exemptions or treaties apply.
## Real-world Example
- *Anna* holds a A$30M shareholding in an Australian company. She plans to sell in September 2025. Under the new rules, Anna must notify the ATO **before** the transaction—if she doesn’t, her transaction may face unexpected withholding or penalties.
- *But if* a foreign resident sells an asset for A$10M, no notification is needed—but they’re still bound by other CGT rules.
## Action Plan Before 1 July 2025
1. Identify any share or membership interest holdings that may exceed A$20M or may become so due to market movements.
2. Engage with legal/tax advisors who know international tax and treaties.
3. Consider structuring or sell-timing decisions to manage liability.
4. Monitor announcements for when the proposed law becomes enacted.
**Why It Matters:** These changes signify tightening of transparency and tax collection from foreign investors. For those outside Australia, knowing about obligation in advance can avoid surprise liabilities.