Private ruling: Leaving Australia
Published: March 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Questions and answers | 1. Should you include pension and interest income earned prior to you leaving Australia permanently in your income tax return? | Yes. | 2. Will you need to lodge returns in Australia after you move to Country A permanently? | No.

Relevant facts and circumstances: You are moving permanently to Country A. You will not be a resident of Australia for tax purposes when you move to Country A. Your income is based solely on a Country A pension and Australian bank interest. You will be returning to Australia for holidays each year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5.

Reasons for decision: Summary: 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 If your status has changed from resident to foreign resident during the income year, answer 'yes' to the question 'Are you an Australian resident?' on your tax return. This ensures you are taxed at resident rates for the tax year. Your non-residency for part of the year is taken into account by a reduction in your tax-free threshold. From the date you cease to be an Australian resident, there is no need to disclose your foreign source income in your tax return. Also, all Australian sourced interest, dividends and royalties derived after you ceased to be an Australian resident are subject to the withholding tax provisions as a final tax and should not be included in your tax return. You should notify all your Australian investment bodies of your address in Country A. Provided your only source of Australian income is interest or dividend income you will not need to lodge returns in the future.