Private ruling: Temporary Residence
Date of advice: 13 September 2017
Published: January 2018
Ruling period: The year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Were you a temporary resident of Australia for the time you spent in Australia during the 2016-17 financial year? | A1: Yes

Relevant facts and circumstances: You were born and raised in Country X You are a citizen of Country X. You enter and stay in Australia on a Special Category Visa. You do not own a home in Country X. You have separated from your ex-spouse in 2013. Your previous spouse is a citizen of Country X and travelled to Australia on a Special Category Visa. Your ex-spouse is a citizen of Country X and maintains a passport for Country Y. You co-parent your son who resides in Australia and attends school in Australia. Your intention is to remain in Australia while your son attends school. Apart from your son you have no other family in Australia. You do not have any employment or business ties with Australia. You do not own your own home in Australia or Country X. While in Country X you stay with family. You currently have a 12 month lease on a house in the Gold Coast. You still maintain personal bank accounts in Country X. You have only received Family Tax Benefit A in terms of subsidies and payments from the Australian Government. You have previously lived in Australia for a number of years. You are currently not in a relationship.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 995-1 | Income Tax Assessment Act 1997 section 6-5 | Migration Act 1958 section 32 | Social Security Act 1991 section 7

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. You hold a temporary visa that is not a protected visa and you, nor any spouse you may have had were an Australian resident under the Social Security Act 1991 . While you reside in Australia under the ordinary meaning of the word you are a temporary tax resident. | Detailed Reasoning - Residency: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that 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, where you are a foreign resident, your assessable income includes only income derived from an Australian source. The terms 'resident' and 'resident of Australia' are defined within the tax provisions which provide four tests to ascertain the residency status of an individual. Relevant to your situation is the ‘resides’ test of residency which is discussed in Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia. Paragraph 16 of TR 98/17 states that a migrant who comes to Australia intending to reside here permanently is a resident from arrival. In your situation, you arrived in Australia with the intention of living here permanently while your son was in school and you leased a house to that effect. You therefore were a resident from the time you entered Australia. | Detailed Reasoning - Temporary Resident: You are a temporary resident as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 97) if: a) you hold a temporary visa granted under the Migration Act 1958 ; and b) you are not an Australian resident within the meaning of the Social Security Act 1991 (SSA); and c) your spouse is not an Australian resident within the meaning of the SSA. However, you are not a temporary resident if you have been an Australian resident (within the meaning of this Act), and any of paragraphs (a), (b) and (c) are not satisfied, at any time after the commencement of this definition. Temporary Visa test The special category visa subclass 444 (SCV) is considered a temporary visa under section 32 of the Migration Act 1958 . You have only entered the country on this visa and are currently residing in Australia on this visa. Australian resident under the SSA test Section 7(2) of the SSA sets out that an ‘Australian resident’ is a person who: (a) resides in Australia; and (b) s one of the following: (i) an Australian citizen; (ii) the holder of a permanent visa; (iii) a special category visa holder who is a protected SCV holder. While you do reside in Australia, you are not an Australian citizen or the holder of a permanent visa. Section 7(2A) to Section 7(2D) provide the scope of SCV holders who would be protected SCV holders. Factors to look at include but are not limited to: ● Presence in Australia on 26 February 2001 ● Period of time in Australia in the two years prior to 26 February 2001 ● Whether they were receiving a social security payment on the 26 February 2001 ● Whether they were temporarily absent from Australia on 26 February 2001 ● Whether they returned to Australia in a timely fashion after their temporary absence. You do not meet any of the factors to make your SCV a protected SCV and are therefore not an Australian resident under the SSA. The spouse test The same test from the SSA also applies if you had a spouse. You had an ex-spouse who was a citizen from Country X, who you travelled and lived with in Australia. They also were not on a protected SCV and therefore not an Australian resident under the SSA. | Detailed Reasoning - Conclusion: You reside in Australia under the ordinary concepts test; however you are a temporary resident for tax purposes for the time you spend in Australia.