ATO would administer backdated CGT laws over past four years
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The news: A controversial proposal to backdate the capital gains tax regime for foreign investors would be enforced by the Australian Taxation Office over the past four years, despite concerns retrospectivity would reduce Australia’s investment attractiveness.
The context: In draft legislation released by Treasury on 10 April, the government proposed to expand the scope of assets considered ‘real property’, which would subject foreign investors to capital gains tax when they sell them, and backdate it to December 2006.
In a note released overnight, the ATO said “in practice, we would continue our current compliance approach for disposals that are currently subject to review [or] have occurred in the past four years”.
In late 2025, the tax commissioner lost two federal court proceedings initiated by YTL Power and Newmont. It was respectively ruled that the companies did not need to pay CGT on infrastructure or mining equipment disposals.
The ATO said the draft law “aligns with how we have administered the law” and would not expect to change its existing administrative approach.
The ATO said that generally it wouldn’t conduct a review on disposals older than four years “even if the period of review is still open”.
However, the ATO may choose to review older cases that “came to our notice for other reasons”, such as a taxpayer applying for a ruling involving the amended law. It would not seek to re-open settlements that were intended to be final “except in very rare exceptions”.
What they said: “Therefore, we don’t expect the retrospective changes to the law, if they’re enacted, to affect many taxpayers,” the ATO note reads.
“The changes will mainly clarify the law for those taxpayers already subject to review or who would normally be subject to review.”
The source: ATO website
