FRCGW Clearance Certificate: Applying for a Client

An FRCGW clearance certificate confirms your client’s Australian tax residency so the buyer does not withhold foreign resident capital gains withholding from the sale price. Apply for each seller separately, then give the buyer each certificate at or before settlement.

What an FRCGW Clearance Certificate is and When a Seller Needs One

An ATO-issued clearance certificate removes FRCGW withholding for an Australian resident vendor when the purchaser receives a valid certificate before settlement. Every Australian resident selling or disposing of Australian real property needs one, regardless of price, unless a specific exemption or class variation applies.

The ATO’s clearance certificate guidance covers a client’s home, vacant land, residential and commercial buildings. It also covers Australian mining, quarrying or prospecting rights and indirect property interests carrying a right to occupy land or buildings.

FRCGWCC and FRCGW clearance are shorthand for the same certificate. The form’s full name is the foreign resident capital gains withholding clearance certificate application. A foreign resident client considers a withholding-rate variation instead of applying for this certificate.

This document addresses withholding on an Australian property transaction. A certificate of residency for an overseas tax authority serves a different purpose.

How Much the Buyer Withholds Without a Certificate

The buyer generally withholds 15% of the sale price when a seller has no valid certificate under the current regime. The threshold is zero, so a modest suburban property is caught as readily as a high-value sale.

The contract date determines the applicable regime, even when settlement occurs after a rate change. Use the ATO’s contract-date boundaries to place an older contract in the correct row.

Contract regime under the ATO’s commencement rules	Withholding rate	Property-value threshold
Current regime	15%	No minimum
Earlier regime replaced by the current rules	12.5%	$750,000 or more
Original regime replaced by the earlier rules	10%	$2 million or more

For a non-arm’s-length transfer, the withholding basis is market value. A sale price agreed between related parties does not establish that value.

In a hypothetical sale, your client sells an existing residential unit for $600,000 under the current regime. Without a certificate at settlement, the buyer withholds $90,000: $600,000 multiplied by 15%. The buyer pays that amount to the ATO, so the client receives $510,000 before other settlement adjustments.

With joint owners, withholding follows each owner’s legal share. If two owners hold equal shares in that unit and only one supplies a certificate, the buyer withholds $45,000 for the other owner. One certificate does not protect both sellers.

Who May Lodge the Application for a Client

The vendor, an Australian legal practitioner or a registered tax agent acting for the vendor can lodge a clearance certificate application. Record the client’s instruction on the file before you apply. Your engagement letter or a short scope note can state whether this work is included in the agreed fee.

Each vendor on the title needs a separate application. Spouses selling their jointly owned home need two applications, and the ATO does not accept a joint application.

A conveyancer who is neither a legal practitioner nor a registered tax agent can transmit client-supplied information as a data entry service. Under TPB conveyancing guidance, they can provide a paper form for the vendor to complete, then enter and transmit those answers online. They cannot advise the vendor how to answer tax questions.

The conveyancer must make their role clear and retain evidence that the client reviews or signs the information being transmitted. Tax questions belong with the registered tax agent or legal practitioner.

Clearance Certificate Application for Australian Residents, Step by Step

Lodge through the ATO’s public online form using the representative option. Gather the information first because an incomplete application cannot be saved and resumed later. The ATO’s online application instructions set out these screens.

1. Select Vendor’s representative in Application type. Enter the contract date, or an anticipated contract date if nothing is signed, and the expected settlement date.
2. Complete Who can the ATO contact about this form with your practice contact’s details. The ATO sends its decision to that contact and the vendor.
3. Enter Vendor details for the legal owner. Match the title and answer the residency and return-lodgement questions using the client’s confirmed information.
4. Complete Application details if the vendor’s answers open that screen. Provide the additional residency information for the individual or company.
5. Add supporting documents in Attachments where they explain the application. Use the evidence relevant to the issue, such as residency records or estate documents.
6. Complete the declaration and the required anti-robot check. Review the answers before selecting Submit.
7. On the confirmation screen, select Print friendly version and save a PDF or print the application. File that copy as evidence of successful lodgement.

A confirmation screen means the application is lodged. It does not mean the certificate has issued. Keep the request open on your practice’s work list until the decision arrives and the purchaser receives the certificate.

For the broader work of accessing a client’s ATO records, use the Online services for agents guide. The certificate procedure here follows the public application route.

Details to Collect From the Seller Before You Apply

Collect the title and confirmed vendor details before opening the form. A recent copy of the certificate of title lets you identify every seller and compare their names with ATO records.

Your collection checklist needs:

• The vendor’s legal name as shown on the title and their entity type.
• Their TFN and ABN, where held. These fields are optional, but the ATO says they help identify the vendor and speed processing.
• Date of birth for an individual.
• The vendor’s address and an email address or phone number. Providing both contact methods helps the ATO resolve questions.
• The contract or anticipated contract date and expected settlement date.
• Any evidence needed to explain residency, ownership or a name change.

Ask whether residency has changed since the last tax return or will change before the sale. Confirm whether both returns for the last two years whose due dates have passed are lodged. Also ask whether the vendor holds the property for a foreign resident or an entity that includes a foreign resident.

A residency-change answer of Yes, or a two-year returns answer of No, opens Application details. For individuals, collect information about their home, time in Australia, family location and overseas ties. For companies, the questions address incorporation and, where relevant, Australian business activity, central management and voting control.

Attach evidence that explains the answers. Examples are travel and residence records, supporting information about where the client lives, or a will and grant of probate for an estate. An outstanding-return issue also needs a separate plan to bring the client’s late tax returns up to date.

Tax Genie’s guided forms check TFN and ABN format and collect the client’s entity details. Use those checked details alongside your property-sale checklist. Confirm the name against the title before entering the ATO application.

Trustees, Companies, Smsfs and Deceased Estates

The entity with legal title applies for the certificate, which usually means the trustee for a trust or self-managed super fund. The trustee applies in their own capacity with their own TFN or ABN as the identifier. The trust or fund’s details do not replace the trustee’s identity.

Check that the Australian Business Register’s associate details show the current trustee. If a corporate trustee has no TFN, attach the trust details and the company’s ACN. A copy of the trust deed can show the purchaser why the trustee on the certificate is the owner acting for the trust.

For a company-owned property, use the company’s legal name on the title. A consolidated group’s head company can hold a certificate with the group members attached. Alternatively, a subsidiary can apply for a certificate in its own name. Update group membership records before applying.

An estate sale to an outside buyer needs a certificate through its Australian resident legal personal representative. Where the application is on behalf of the deceased vendor named on the title, the ATO’s estate-specific instruction is to select Trustee. Include the deceased vendor’s name as it appears on that title. You do not need to add as executor for to the name.

If title has already transferred to the legal personal representative, that representative applies in their own capacity as the individual or company owner. Match the application to the actual title-holder instead of assuming every estate sale has the same applicant.

The ATO identifies a nil-withholding class variation for property acquired by a beneficiary of the will, a surviving joint tenant or the legal personal representative. That transfer is different from the representative’s later sale to an outside buyer. The ATO’s linked clearance guidance explains the class variation and its estate conditions. Estate return obligations and CGT belong in the deceased estate tax return guide.

Processing Times and Why an Application Stalls

The ATO says a clearance certificate can take up to 28 days and requires applications at least 28 days before settlement. Apply when the client first considers selling. You can lodge before a contract is signed.

Recent unlodged returns, a residency change, a name mismatch or complex ownership can delay processing. Separate applications for joint owners can finish at different times, so track each certificate individually.

The individual’s first and last names must match the title. Middle names and honorifics such as Ms or Dr do not need to match. If the title has the correct legal name but ATO records do not, update those records before applying.

A marriage certificate or legal change-of-name certificate can support the update. A statutory declaration alone does not satisfy the ATO’s supporting-document requirement. Overseas proof of a name change requires the ATO’s postal update route.

When settlement is close, phone 13 28 66, using Fast Key Code 4, 2, as published in the online form instructions. Have the lodged application details available. The ATO does not guarantee a decision by settlement for a late application, so tell the client and conveyancer what is still outstanding.

After It Issues: Validity, Settlement and a Missed Deadline

Give the purchaser the issued certificate at or before settlement and keep evidence of delivery. The ATO emails the certificate when an email address is supplied. Otherwise, it posts it using the application addresses.

An individual can also retrieve the decision through myGov-linked ATO online services. From My profile, select Communication, then History.

The certificate is valid for 12 months from issue while the vendor’s residency remains unchanged. It can cover several property sales in that period. There is no requirement to use it if the planned sale falls through.

For a long off-the-plan contract, settlement can occur after the certificate’s expiry. The buyer can rely on it if delivery occurs within its valid period and that period overlaps the transaction between contract and settlement. A certificate first delivered after expiry does not meet that rule.

If the buyer withholds anyway, obtain their FRCGW payment confirmation. Claim Credit for foreign resident capital gains withholding amounts in the client’s return for the income year the contract is signed. Settlement in a later income year does not move the credit to that year. The credit is not prefilled, so enter it at the correct return label.

Withholding does not guarantee a cash refund of the same amount. Tax payable on the sale and existing tax debts affect the eventual refund. Keep the purchaser’s confirmation with the return records and address any relevant ATO account or tax-debt checks.

The ATO can withdraw a certificate if it learns the vendor is a foreign resident. A false or misleading statement can leave the vendor liable and expose them to prosecution.

Close the certificate task only when each title-holder’s certificate matches the owner, meets the validity rule and reaches the purchaser before settlement. If withholding occurs, keep a separate return task for the correctly allocated credit.