Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1051282271773

Date of advice: 13 September 2017

Ruling

Subject: Temporary Residence

Question 1

Were you a temporary resident of Australia for the time you spent in Australia during the 2016-17 financial year?

Answer

Yes

This ruling applies for the following periods:

The year ended 30 June 2017

The scheme commences on:

1 July 2016

Relevant facts and circumstances

You were born and raised in Country X

You are a citizen of Country X.

You enter and stay in Australia on a Special Category Visa.

You do not own a home in Country X.

You have separated from your ex-spouse in 2013.

Your previous spouse is a citizen of Country X and travelled to Australia on a Special Category Visa.

Your ex-spouse is a citizen of Country X and maintains a passport for Country Y.

You co-parent your son who resides in Australia and attends school in Australia.

Your intention is to remain in Australia while your son attends school.

Apart from your son you have no other family in Australia.

You do not have any employment or business ties with Australia.

You do not own your own home in Australia or Country X.

While in Country X you stay with family.

You currently have a 12 month lease on a house in the Gold Coast.

You still maintain personal bank accounts in Country X.

You have only received Family Tax Benefit A in terms of subsidies and payments from the Australian Government.

You have previously lived in Australia for a number of years.

You are currently not in a relationship.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 995-1

Income Tax Assessment Act 1997 section 6-5

Migration Act 1958 section 32

Social Security Act 1991 section 7

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Summary

You hold a temporary visa that is not a protected visa and you, nor any spouse you may have had were an Australian resident under the Social Security Act 1991. While you reside in Australia under the ordinary meaning of the word you are a temporary tax resident.

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.

The terms 'resident' and 'resident of Australia' are defined within the tax provisions which provide four tests to ascertain the residency status of an individual.

Relevant to your situation is the ‘resides’ test of residency which is discussed in Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.

Paragraph 16 of TR 98/17 states that a migrant who comes to Australia intending to reside here permanently is a resident from arrival.

In your situation, you arrived in Australia with the intention of living here permanently while your son was in school and you leased a house to that effect. You therefore were a resident from the time you entered Australia.

Temporary Resident

You are a temporary resident as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 97) if:

Temporary Visa test

The special category visa subclass 444 (SCV) is considered a temporary visa under section 32 of the Migration Act 1958. You have only entered the country on this visa and are currently residing in Australia on this visa.

Australian resident under the SSA test

Section 7(2) of the SSA sets out that an ‘Australian resident’ is a person who:

While you do reside in Australia, you are not an Australian citizen or the holder of a permanent visa. Section 7(2A) to Section 7(2D) provide the scope of SCV holders who would be protected SCV holders. Factors to look at include but are not limited to:

You do not meet any of the factors to make your SCV a protected SCV and are therefore not an Australian resident under the SSA.

The spouse test

The same test from the SSA also applies if you had a spouse. You had an ex-spouse who was a citizen from Country X, who you travelled and lived with in Australia. They also were not on a protected SCV and therefore not an Australian resident under the SSA.

Conclusion

You reside in Australia under the ordinary concepts test; however you are a temporary resident for tax purposes for the time you spend in Australia.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).