The foreign resident capital gains tax (CGT) withholding regime requires a purchaser of certain Australian property to withhold an amount from the purchase price (for remission to the ATO) if the vendor is a foreign resident. This regime is designed to assist the ATO in collecting CGT payable by foreign residents. 

If the vendor is an Australian resident, they must provide an ATO-issued clearance certificate to the purchaser on or before the day of settlement to ensure no withholding occurs. To apply for this certificate, Australian resident vendors must use the Foreign resident capital gains withholding clearance certificate application form to notify the ATO that foreign resident CGT withholding doesn't need to be withheld from the sale of the property. The form needs to be completed and lodged with the ATO as early as practical because it can take 14 days to process.

Trusts and superannuation funds

The ATO has provided updated information for trusts and superannuation funds. If the entity that has legal title to the asset is the trustee, the ATO says that it should (in its capacity as either a company or an individual) apply for the clearance certificate using its own tax file number (TFN) or Australian business number (ABN) as the identifier (if it has one). The ATO recommends including the Australian company number (ACN) as an attachment (if the entity has one). If a corporate trustee does not have a TFN, it should include an attachment in the application that provides the details of the relevant trust.

Source: www.ato.gov.au/Forms/Capital-gains-withholding-clearance-certificate-application-online-form-and-instructions---for-Australian-residents/.