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Edited version of private ruling
Authorisation Number: 1011596822413
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
1. Are you a temporary resident of Australia?
Yes.
2. Is your foreign income or foreign capital gains assessable in Australia?
No.
This ruling applies for the following periods:
Year ended 30 June 2008
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
The scheme commences on:
1 July 2007
Relevant facts and circumstances
You are a citizen of country X.
You arrived in Australia on a temporary resident visa - subclass 461 which was granted for five years.
You do not intend to reside in Australia permanently.
You lived in a property in country X which is owned by a limited company of which you are the sole director.
The property is currently being let.
You hold personal and business bank accounts alongside share investments in country X.
You hold a business bank account and personal bank account in Australia.
You are self employed in Australia.
Your spouse is a citizen of country Y who arrived in Australia on a Special Category Visa.
Your child was born in Australia.
Neither you nor your spouse are Australian residents within the meaning of the Social Security Act 1991.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1997 Section 768-910
Income Tax Assessment Act 1997 Section 768-915
Reasons for decision
A temporary resident as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) is a person:
· who holds a temporary visa granted under the Migration Act 1958, and
· who is not an Australian resident within the meaning of the Social Security Act 1991, and
· whose spouse is not an Australian resident within the meaning of the Social Security Act 1991.
Anyone who at any time on or after 6 April 2006, is an Australian resident for tax purposes, and is not classed as a temporary resident, will not be entitled to use the temporary resident concessions from that time on, even if they later satisfy the temporary resident conditions.
The Migration Act 1958 provides that a temporary visa is a visa to travel to and remain in Australia:
· during a specified period
· until a specified event happens, or
· while the holder has a specific status.
Temporary visas are distinguished from permanent visas which allow a person to remain in Australia indefinitely.
Under the Social Security Act 1991, an Australian resident is a person who resides in Australia and is either an Australian citizen or holds a permanent resident visa. Taxpayers who hold a protected category visa and were in Australia on or before 26 February 2001 are also considered to be Australian residents for the purposes of the Social Security Act 1991.
In your case:
· you have temporary resident visa subclass 461 granted by the Department of Immigration and Citizenship
· you are not an Australian resident within the meaning of the Social Security Act 1991 because you are not an Australian citizen or hold a permanent resident visa, and
· your spouse is not an Australian resident within the meaning of the Social Security Act 1991 as she is not an Australian citizen or a holder of a permanent resident visa.
As you satisfy the conditions for a temporary resident as defined in subsection 995-1(1) of the ITAA 1997, you are considered to be a temporary resident.
Foreign sourced income received from 1 July 2006
From 1 July 2006, taxpayers considered to be temporary residents will not have to pay tax in Australia on most of their foreign income if they:
· are an individual who is an Australian resident for tax purposes, and
· satisfy the requirements of being a temporary resident.
Section 768-910 of the ITAA 1997 provides that ordinary income derived from a foreign source (excluding employment related income and capital gains on shares and rights acquired under employee share schemes) is exempt from income tax in Australia when derived by a temporary resident in Australia.
Section 768-915 of the ITAA 1997 provides that foreign capital gains and capital losses are disregarded if you are a temporary resident of Australia.
Therefore, as you are considered to be a temporary resident of Australia any foreign sourced income or foreign capital gains are exempt from tax in Australia under section 768-910 and section 768-915 of the ITAA 1997 respectively.
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