Private ruling: Foreign income of a temporary resident
Date of advice: 22 October 2019
Published: January 2020
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2018

Ruling: Q1: Are you a temporary resident for Australian tax purposes? | A1: Yes | Q2: Is the foreign pension, interest and investment income you derive as a temporary resident subject to tax in Australia? | A2: No

Relevant facts and circumstances: You relocated to Australia from a foreign country with your spouse. Your spouse holds a temporary work visa and you hold a temporary resident spouse visa. Neither you nor your spouse has ever been an Australian citizen or a permanent resident of Australia. You are a resident of Australia for tax purposes. You receive a foreign pension and earn foreign interest. You own a foreign employee provident fund that you have not made any withdrawals from.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 768-910 | Income Tax Assessment Act 1997 Section 768-915 | Income Tax Assessment Act 1997 Section 995-1

Reasons for decision: Detailed Reasoning - Temporary resident: You are a temporary resident if you: · hold a temporary visa granted under the Migration Act 1958 · are not an Australian resident within the meaning of the Social Security Act 1991, and · do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991. The Social Security Act 1991 defines an Australian resident as a person who resides in Australia and is an Australian citizen, the holder of a permanent visa, or a protected special category visa holder. In your case, you are not an Australian resident within the meaning of the Social Security Act 1991 as you are not an Australian citizen, the holder of a permanent visa, or a protected special category visa holder. | Detailed Reasoning - You are a temporary resident because:: · you hold a temporary visa granted under the Migration Act 1958 · you are not an Australian resident within the meaning of the Social Security Act 1991, and · you do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991. | Detailed Reasoning - Income derived as a temporary resident: Where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, subdivision 768-R of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are in Australia and are a temporary resident, you will be subject to the following temporary resident rules: · Any income you earn from a foreign source will not be taxed in Australia, except income earned from employment performed overseas for short periods while you are a temporary resident. · Any capital gain you make from the disposal of an asset that is not taxable Australian property will not be taxed in Australia. · Special rules apply to capital gains on shares and rights acquired under employee share schemes. In your case, as a temporary resident, your foreign pension, interest and investment income is not subject to tax in Australia and does not have to be included in an Australian income tax return.