Q&As

Joanne Wynne on Foreign Investors - New Laws, Fresh Strategies

Monday February 5, 2018

Joanne Wynne has worked in the profession since 1997 and joined RSM in 1999. Joanne has facilitated the Chartered Accountants Australia and New Zealand taxation module and has also lectured undergraduate and post graduate taxation units at Curtin University. Joanne provides taxation consulting and compliance services in the following areas income tax; capital gains tax; international tax; fringe benefits tax; goods and services tax; tax consolidation. Significant projects Joanne has worked on include taxation advice concerning the viability of an international corporation establishing a holding company in Singapore for its operating companies situated in Australia, Malaysia, Philippines and Thailand; Taxation advice concerning the capital gains tax implications for partners of a partnership (a mix of companies and individuals) resulting from the disposal of their interests in a business (being a classified newspaper published on a weekly basis) - the business was subsequently sold for approximately $14m; Scrip for scrip advice to a listed public company in relation to the proposed disposal of its IP for in excess of $30m; Tax structuring advice to various listed public companies in relation to investing in exploration projects in Uruguay, Kyrgyzstan and the Ukraine; Provising Australian and international tax advice to an Australian mining company establishing a mine in the Philippines. Professional associations Joanne is a member of includes - Member, Chartered Accountants Australia and New Zealand and Fellow, The Tax Institute. Joanne Wynne

We had the pleasure of sitting down with Joanne recently to discuss key challenges and opportunities facing the industry today.

You can find the full Q&A below.

Kindly tell us a little bit about yourself (experience, your company, expertise, etc)?

I’ve been in the accounting profession for just over 20 years of which 17 have been with RSM Australia. I’m in the Tax Services division of the Perth office and undertake tax compliance and consulting services for a wide range of clients. My area of specialty is International Tax where I have extensive experience in providing inbound and outbound structuring advice to clients operating in some weird and wonderful locations. As RSM is in 120 countries which includes the top 40 major business centres in the world.

What are some of the challenges facing foreign investors when it comes to investments in real property?

I think both foreign and local property investors have similar challenges when investing in property. Finding a good property manager and tenant is critical to the success of your investment. Foreign investors have the added difficulties that being overseas brings such as time zone differences and possibly language barriers. Added to this is the changing tax landscape with both Federal and State Governments targeting foreign ownership in real property by either removing concessions ie. 50% CGT discount or imposing additional taxes/levies. I also believe obtaining finance would be a  challenge with financiers both locally and overseas being more risk adverse.

What are the common mistakes accounting and legal practitioners usually make when they work in this area?

A common mistake I see is not getting the ownership structure right in the first place. I have seen many examples where investors have been so eager to acquire their property that they haven’t obtained the right structuring advice. If they have acquired their property through a corporate structure they haven’t considered issues such as debt/equity levels and the impact of the thin capitalisation provisions or they haven’t thought about the eventual divestment and distribution of profits.

Recently I advised on a share sale agreement where the underlying assets of the company were taxable Australian property. My advice was sought towards the end of the transaction and once I advised that CGT withholding would apply, there was a mad rush to apply for a withholding variation. This experience just reinforces the need to consult with advisors at all stages so there aren’t nasty surprises along the way.

What are some of the big trends and developments you see ahead for the area?

Depending upon who you speak to, the Perth property market has hit rock bottom while others believe there is still a way to go. I have noticed in the past twelve to eighteen months an increase in foreign investor activity in commercial property within the Perth CBD with Foreign investors capitalising on the economic down turn in Western Australia. Foreign investment is a big part of the Australian economy, the value of Foreign Investment Review Board approvals in commercial real estate in the 2015-16 year was $49.7 billion up from $36.2 billion in the previous year and expected to continue to increase even with the changes in tax laws we have seen in recent years.

Your topics focuses on ‘Foreign Investors: New Laws, Fresh Strategies’, why is it important for practitioners to attend your session?

Over the past 5 years there has been considerable change in taxes applicable to foreign investors. My session will provide a concise summary of the changes and give attendees clear direction in advising overseas investors.

What do you see as some of the key takeaways and benefits for practitioners from attending your session?

The key takeaway from my session will be that there are various issues which need to be considered and careful planning needs to be undertaken to ensure you have covered all bases for your client.

You can hear more from Joanne at the Inaugural Property Tax Conference seminar, being held on Tuesday 06 March at the Parmelia Hilton Perth, Perth.

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