Australia’s New Foreign-Resident CGT Draft: What it Means for Founders Moving to UAE

If you are an Australian owner planning to sell a business or shares around the time you move to the UAE, here is the short version: the foreign-resident capital gains tax change everyone is talking about is still a draft, not law. As of June 2026, Treasury has released an exposure draft and run a consultation, but Parliament has not passed it. The original 1 July 2025 start date was dropped. So nothing has changed in the law itself yet. What has changed is the direction of travel, and the direction is towards a wider net.

This is context for a decision, not tax advice. We are not Australian tax advisers and we don’t pretend to be. What follows is what we have been telling Australian owners who call us mid-move, so they understand the landscape before they sit down with their own adviser.

Where it actually stands

The measure comes from the 2024-25 Federal Budget. It was first slated to start on 1 July 2025. That date was deferred. On 10 April 2026, Treasury released an exposure draft and the consultation period closed on 24 April 2026.

Under the draft, the changes would apply to CGT events on or after the first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent. In plain terms: there is no fixed start date yet, because the Bill has not passed. The exact date will depend on when, and whether, it becomes law, and the wording can still shift.

We have not been able to confirm a passage date or a final start date, because at the time of writing there isn’t one. Treat anything you read that states a firm commencement date as either out of date or a guess. The honest position is: draft, consulted on, not yet law.

What the draft would change

Three things, in plain terms.

First, it broadens what counts as taxable Australian real property, the category of assets a foreign resident still pays Australian CGT on after leaving. More asset types are drawn in.

Second, it changes the principal asset test for indirect interests. If a company derives much of its value from Australian land or resources, shares in that company can be treated as Australian property for CGT, even where the company sits offshore. The draft widens what triggers this.

Third, it adds notification and integrity rules around larger disposals, limiting how far a purchaser can rely on a vendor’s declaration. The draft also reaches back in time: a new statutory definition of “real property” would apply to assets held from 12 December 2006 once the measure receives Royal Assent. As an exposure draft this can still change before it becomes law, so treat the start date as unsettled — but the retrospective reach is in the current text.

None of this is final. The point of saying so plainly is that planning off a draft is planning off a moving target.

One change that is already law

Keep this separate in your head. A different, related change is already in force. From 1 January 2025, the foreign-resident capital gains withholding rate rose from 12.5% to 15%, and the old AUD 750,000 property-value threshold was removed. So withholding can now apply to taxable Australian property sales regardless of value.

That one matters today, not “once the draft passes”. If you are selling Australian property as part of your move, your adviser will tell you whether a clearance certificate or a rate variation applies. This is the part of the picture that is settled, so it is worth getting right first.

How this lands for an owner moving to the UAE

The cliché plan is to leave Australia, become a non-resident, then sell in the new tax year with no Australian CGT bill. That plan was always thinner than it sounded. Becoming a non-resident does not switch off Australian CGT on taxable Australian property, and the draft would make the category of “taxable Australian property” larger.

So the practical takeaways are narrow and boring, which is how good ones usually look:

• Don’t crystallise a large position on the old assumption that non-residency cleans it up. Get an Australian opinion on your actual assets first.
• If you hold Australian shares with heavy exposure to Australian land or resources, the indirect-property tests are the ones to check, line by line.
• If you have built layered structures over the years, an operating company, a holding company, a portfolio, a trust, don’t assume the structure that fit the old rules fits the new direction.
• Treat residency change, asset disposals and the timing of both as one coordinated decision, not three separate ones made by advisers who never speak.

Tax is one input here. It is not the reason to move a real business to the UAE, and we wouldn’t frame it as one. It is part of the landscape you plan around once you have decided the move makes commercial sense.

Where we fit, and where we don’t

We run the UAE side. We design the company you will trade or hold through, get the banking right, sort residency, and make sure the substance is real before any of it goes near a tax authority. UAE corporate tax and structure are our patch and we handle them directly.

Australian tax we don’t do in-house. We are not Australian tax advisers and we don’t give Australian tax advice. We work alongside your Australian adviser on the Australian-side opinion, and we don’t sign off the UAE structure until it actually matches the Australian position you and your adviser have agreed. If you arrive without an Australian adviser, we’ll point you to one.

The common failure is two advisers building two halves of a structure that don’t quite meet in the middle. The UAE company is fine on its own, the Australian exit position is fine on its own, but the join assumes things that aren’t true. Our job is the join, and the honesty about where our remit ends.

What to do now

While the draft is still a draft, there is rarely a tax reason to rush and several reasons not to. A sensible order:

One. Get a current-state opinion from your Australian tax adviser on your specific asset mix, against the existing law and the draft as it stands. Generic answers won’t help you.

Two. Sort the part that is already law, the 1 January 2025 withholding change, if you are selling Australian property.

Three. If you are proceeding with the UAE side, build it with full sight of the Australian side, not as a separate workstream bolted on later.

If you want a straight conversation about how the UAE side should be sequenced around your Australian position, you can get in touch. We’ll tell you what we can do, what we can’t, and where your Australian adviser has to lead.

Common questions

Has Australia's foreign-resident CGT expansion become law?

Not as of June 2026. Treasury released an exposure draft on 10 April 2026 and consultation closed on 24 April 2026. The measure has not passed Parliament. It is still a draft Bill, and the wording can change before it becomes law.

When would the new foreign-resident CGT rules start?

The original 1 July 2025 start date was dropped. Under the draft, the changes would apply to CGT events on or after the first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent. The exact start date depends on when, and whether, it passes.

What is already in force for foreign residents selling Australian property?

A separate change is already law. From 1 January 2025 the foreign-resident capital gains withholding rate rose from 12.5% to 15% and the AUD 750,000 property-value threshold was removed, so withholding can apply to all taxable Australian property sales.

Does moving to the UAE remove my Australian capital gains tax?

Not automatically. Becoming a non-resident does not switch off Australian CGT on taxable Australian property, and the draft would widen what counts as taxable Australian property. Your residency change, asset disposals and the timing of both need an Australian tax adviser's view on your facts.

Can Start Business Services give me Australian tax advice?

No. We are not Australian tax advisers and we don't give Australian tax advice. We handle the UAE side, company structure, banking, residency and substance, and we work alongside your Australian adviser so the two halves fit together.