Private ruling: Assessable income
Date of advice: 19 March 2021
Published: May 2021
Ruling period: Year ending 30 June 2021
Date scheme commenced: 1 July 2020

Ruling: Q1: Does Australia have a taxing right under Article X of Country Z Convention in respect of capital gains which arise from the disposal of assets which were acquired while you were a resident of Australia but disposed of while you were a Country Z resident, where you made a choice under subsection 104-165(2) of the Income Tax Assessment Act 1997 to disregard making a capital gain on the assets upon cessation of Australian residency for tax purposes? | A1: No. Australia does not have any taxing rights on any capital gain made on the disposal of assets you purchased while a resident of Australia for taxation purposes. Article X of the Double Tax Agreement between Australia and Country Z gives Country Z the sole taxing rights on any capital gain made on the assets.

Relevant facts and circumstances: You are currently a non-resident of Australia for taxation purposes. You are currently a resident of the Country Z for the purposes of the Double Taxation Agreement (DTA) between Country Z (XXX) and Australia. You are not a resident of any other countries for the purpose of the DTA. You purchased CGT assets when you were a resident of Australia for taxation purposes. You made an election under Section 104-165 to defer any CGT made on the disposal of the assets when you left Australia. You have disposed of the assets while being a resident of Country Z.

Relevant legislative provisions: International Tax Agreements Act 1953 | Income Tax Assessment Act 1997 subsection 104-165(2)