Australia’s New Foreign-Resident CGT Draft: What it Means for Founders Moving to UAE
If you’re an Australian founder planning to sell shares or property the year you move to Dubai, your timing just changed.
On 10 April 2026, Australian Treasury released an exposure draft expanding the foreign-resident capital gains tax (CGT) rules. The draft broadens what counts as taxable Australian property, expands the share-disposal rules, and includes elements that look retrospectively at structures you may have set up years ago.
The consultation closes 2 June 2026 and the final form may differ from the draft. Here’s why it matters today: if you’ve been told “wait until you’re a non-resident, then sell” — that advice was always thinner than it sounded, and the new draft makes it thinner still. The window between an Australian residency change and a clean asset disposal is no longer something to assume away.
We’ve been getting calls about this from Australian founders mid-relocation. The questions are practical, not theoretical: what do I do with the AU operating business, what about the share portfolio, and is the structure I built in 2014 still fit for purpose. Below is what we’ve been telling them.
What the draft actually changes
Three things in plain terms.
First, the draft widens what gets called “taxable Australian property” — meaning assets a foreign resident still pays Australian CGT on after departure. The previous rules carved out most non-real-estate assets once you’d left. The draft pulls more share holdings back inside the net.
Second, it broadens the rules around indirect Australian real property holdings. Plain-English version: if a company you own derives a significant slice of its value from Australian land, infrastructure, or fixed assets, your shares in that company can be deemed Australian property for CGT purposes — even if the company itself is offshore. The draft expands what triggers this.
Third, parts of the draft reach backwards. They potentially apply to structures and arrangements set up under the old rules, not just to new disposals from the date the legislation passes. That’s the retrospective element practitioners have been flagging.
None of this is final. The consultation period is open and the final wording may shift. But the direction of travel is clear, and prudent planning treats the draft as the working assumption rather than the optimistic one.
Three scenarios that show how this lands
Abstract description of legislation isn’t useful when you’re trying to make a decision. Three real-world cases we’ve worked through with Australian founders since the draft dropped.
Scenario A: Australian founder selling an AU operating business before relocating
You’ve built and run an Australian trading business. You’re planning to sell, take the proceeds, and move to the UAE — Dubai or Abu Dhabi. The cliché plan: leave Australia, become a non-resident, sell the business in the new tax year, walk away with the proceeds and no Australian CGT bill.
Reality under the draft: the broadened “indirect Australian real property” tests catch more share disposals than they used to. Goodwill and unrealised gains within an Australian operating business can be reached more readily. The clean window between residency change and disposal — already narrow in practice — gets harder to use without being challenged.
What this means for you: don’t crystallise a large position based on the old assumptions. If you’re mid-flight on a sale, the sequence matters more than ever. Get a current Australian tax opinion on the disposal under both the existing rules and the draft as it stands. Then time the move, the residency change, and the sale as one coordinated piece — not three separate decisions made by three separate advisers who never speak to each other.
Where we sit in this: we run the UAE side. We design the company you’ll be trading or holding through, get the banking right, and make sure the substance is real before any of it goes near a tax authority. We work alongside your Australian tax adviser on the AU-side opinion rather than trying to pretend we can give it ourselves. If you don’t have a qualified AU adviser yet, we’ll point you to one.
Scenario B: Australian founder with a portfolio of AU-listed shares
You’ve held ASX-listed shares for years — sometimes decades. Some are passive investments, some are stakes in companies you’ve been close to. The standard relocation plan is to sell post-residency change, often into a UAE personal or corporate holding structure, and reset cost bases on the way out.
The draft tightens what counts as “indirect” Australian real property within those holdings. ASX-listed entities with significant Australian property exposure on their balance sheet — REITs, infrastructure trusts, mining companies, large industrials with AU-based fixed assets — can be pulled inside the foreign-resident CGT net even where individual investors had assumed they were outside it. Some shares you thought were neutral may now sit on the wrong side of the line.
What this means for you: a portfolio review against the new tests, line by line, before any disposal — pre-departure or post. The default of “sell once non-resident, no AU tax” is no longer safe to apply across the board. For some holdings it still works. For others it doesn’t, and the draft makes the second category larger than it used to be.
Practically, the sequencing tends to look like this: AU adviser maps the portfolio against the draft tests; we design the UAE holding structure that the cleared positions will sit in; nothing gets sold until both sides have signed off the order of operations.
Scenario C: Australian founder with a property and business mix considering wholesale relocation
You’ve spent fifteen or twenty years building a layered structure: an operating business, a property holding company, an investment portfolio, sometimes a family trust on top. The architecture made sense under the rules in force at the time — between roughly 2010 and 2020. You’ve been considering a full relocation to the UAE, with the family, on a multi-year horizon.
This is where the retrospective elements of the draft hit hardest. Structures set up perfectly properly under the old framework can be reached by the new rules in ways the original advice didn’t contemplate. We’re not talking about aggressive avoidance — we’re talking about ordinary planning that the legislation’s expanded scope now treats differently.
What this means for you: don’t assume the structure you have today is fit for the framework that’s emerging. Before you trigger anything material on the UAE side — before incorporating, before moving people, before opening accounts — get a current-state Australian tax review. The point isn’t to scare you out of the plan. It’s to make sure the plan you execute matches the rules that will actually apply, rather than the rules you remember from when the structure was first built.
For families in this category, we typically run a short pre-engagement phase: AU adviser produces a current-state opinion; we map the UAE structure that complements it; bank compliance is consulted before any licence is filed. The sequence costs a few weeks at the front end and saves months — sometimes years — of cleanup at the back.
What we do, and what we don’t
We’re a UAE structuring firm. UAE corporate tax, freezone licensing, banking, residency, substance — that’s our patch, and we handle it directly.
UK tax we cover in-house through UK qualified tax consultants who handle the UK side of cross-border situations: Statutory Residence Test analysis, post-non-dom planning, exit timing, and ongoing UK return obligations. That’s a real capability, not a content claim.
Australian tax we don’t have in-house. We work alongside Australian-qualified tax advisers on the AU-side opinion, rather than refer-and-disappear. The difference matters: we stay in the conversation, we make sure the UAE structure being built actually matches the AU tax position being assumed, and we don’t sign anything off on the UAE side until your AU adviser has signed off on theirs. If you arrive without an AU adviser, we’ll introduce you to ones we’ve worked with.
That coordination is the point. The standard failure mode for Australian founders moving to the UAE is two advisers building two halves of a structure that don’t quite fit together — the UAE company is fine in isolation, the AU exit position is fine in isolation, but the join between them assumes things that aren’t true. Our job is to make sure the join works.
Practical next steps
If you’re an Australian founder weighing a UAE move, four things to do this quarter while the consultation is still open and the final form is still moving.
One. Get a current-state opinion from your Australian tax adviser. Specifically, ask them how the 10 April draft applies to your particular asset mix — operating business, listed shares, property, holding companies, trusts. Generic answers are not useful here. You want a written view on your facts.
Two. Hold off on crystallising large positions until the final form of the legislation is clearer. The consultation closes 2 June 2026; final wording will follow. There is rarely a tax reason to act in the consultation window itself, and several reasons not to.
Three. If you’re proceeding with the UAE side, build it with full visibility of the AU side — not as a separate workstream. The IFZA, DIFC, or mainland decision; the holding structure; the personal residency timeline; the banking — all of it should be designed to match the AU tax position you and your adviser have agreed, not to be reconciled with it after the fact.
Four. If you’d like a 30-minute conversation to map what the draft means for your specific situation and how the UAE side should be sequenced around it, you can get in touch here. We’ll tell you what we can do, what we can’t, and where we’ll bring in your Australian adviser before anything is committed.
Sources
- Australian Treasury — Exposure Draft, expansion of foreign-resident capital gains tax rules (released 10 April 2026; consultation closes 2 June 2026)
- Income Tax Assessment Act 1997 (Cth) — Division 855 (foreign-resident CGT regime), as proposed to be amended by the exposure draft
- Australian Taxation Office — published guidance on taxable Australian property and indirect Australian real property interests (current as of May 2026)
- UAE Corporate Tax Law and Cabinet Decision on Qualifying Free Zone Persons (governing the UAE-side structuring options referenced)
Disclaimer: This article is intended for general informational purposes only and is based on regulations, policies, and practical experience at the time of writing. While we aim to keep all information accurate and up to date, business, banking, tax, and compliance requirements can change and may differ depending on individual circumstances.
Nothing contained in this article should be considered formal legal or financial advice. If you are unsure how any information may apply to your situation, we recommend seeking advice from a suitably qualified professional.
