Private ruling: Foreign source income
Date of advice: 20 August 2021
Published: October 2021
Ruling period: Year ending 30 June 2022
Date scheme commenced: 1 July 2021

Ruling: Q1: Is the income you receive from a foreign country retirement savings plan assessable income in Australia? | A1: No

Relevant facts and circumstances: You and your spouse hold temporary visas and are tax residents of Australia. You are both temporary residents of Australia. You have retired. You will receive payments from a foreign country retirement savings plan (the Plan).

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 6-5(2) | Income Tax Assessment Act 1997 section 768-910

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year. The foreign source income exemption for temporary residents, contained in Subdivision 768-R of the ITAA 1997, provides an exemption for most foreign income derived by temporary residents of Australia. Section 768-910 of the ITAA 1997 provides that ordinary income derived from a foreign source, excluding where the income relates to employment or other personal services provided by the individual; is exempt from income tax in Australia when derived by a temporary resident of Australia. The income is non-assessable non-exempt income. In your case, you are a temporary resident of Australia, you have retired, you will receive payments from the Plan. These payments are from a foreign source. Accordingly, the income you receive from the Plan is not assessable income in Australia.

This ruling applies for the following period: