Private ruling: Residency
Date of advice: 5 November 2019
Published: January 2020
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: Yes. | Q2: Are you subject to the Working Holiday maker (WHM) rates of tax while on a bridging visa? | A2: No.

Relevant facts and circumstances: You are a citizen of Country Y. You were born in Country Y. You arrived in Australia on in the 2015 income year. You were on a 417 working holiday maker visa. You extended this visa on XX XXX 2015.This visa expired on X XXX 2016. You applied for a 457 visa and were placed on a bridging visa on X XXXX. Your 457 visa was granted on XX XXX 2019. You intend on applying for a partner visa in the near future. You intend on residing in Australia on a permanent basis. You live with your Australian partner in Australia. You have three bank accounts in Australia along with a car and a motor bike. You are a volunteer fire fighter in Australia and a member of a football club. You have worked for your current employer since 2015. You have no assets in Country Y. You are not a resident of any other country for taxation purposes. You and your spouse are not eligible to contribute to the PSS or the CSS Commonwealth Government superannuation funds.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision: 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. Section 995-1 of the ITAA 1997 defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936). The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. The tests are: § the resides test, § the domicile test, § the 183 day test, and § the superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. | Detailed Reasoning - Application to your circumstances: Having considered your circumstances as a whole and the relevant residency tests, you are a resident of Australia for income tax purposes. Further information on residency can be found by searching 'QC 33232' on ato.gov.au | Detailed Reasoning - Working Holiday Maker status: The Working Holiday Maker (WHM) tax rates take effect during the period you are considered to be a WHM. The end of the WHM Visa marks the date new tax rates are to be applied. In this case, you are not subject to the WHM tax rates from the cessation of your WHM Visa on X XXXX2016. From X XXXXX2016 the resident rates of tax apply to your income which includes the tax free threshold. The following is the definition of a working holiday maker: An individual is a working holiday maker at a particular time if the individual holds at that time: (a) a Subclass 417 (Working Holiday) visa; or (b) a Subclass 462 (Work and Holiday) visa; or (c) a bridging visa permitting the individual to work in Australia if: (i) the bridging visa was granted under the Migration Act 1958 in relation to an application for a visa of a kind described in paragraph (a) or (b); and (ii) the Minister administering that Act is still to make a decision in relation to the application; and (iii) the most recent visa, other than a bridging visa, granted under that Act to the individual was a visa of a kind described in paragraph (a) or (b) (subsection 3A(1) of the Income Tax Rates Act 1986 ). This means that from X XXXX 2016 you were not subject to the WHM rates of tax as you were on a bridging visa that was not granted in relation to an application for a visa that was either a Subclass 417 or 462 visa.