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Authorisation Number: 1012321688311

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Ruling

Subject: Residency of a trust

Question 1:

1. Do you, as trustee, need to register for a tax file number for your family trust in Australia?

Answer:

Yes.

Question 2:

2. Does the trust need to lodge a tax return in Australia?

Answer:

Yes.

Question 3:

3. Is it acceptable to submit financial statements from your country of origin or must an Australian accountant redo them?

Answer:

Invalid.

Question 4:

4. Will you be required to lodge a trust income tax return, regardless of the amount of income involved, unless exempted by the Commissioner?

Answer:

Yes.

This ruling applies for the following period

Year ending 30 June 2014

Year ending 30 June 2015

Year ending 30 June 2016

The scheme commenced on

1 July 2013

Relevant facts

You are a citizen of another country and an Australian resident for tax purposes.

You are one of the trustees of a family trust, registered in your country of origin, and you are also a beneficiary of the trust.

The sole asset of the trust is money invested in your country of origin with interest on the investment taxed at the source.

Your accountant in your country of origin lodges your personal tax return in your country of origin as well as the trust return.

Your Australian accountant lodges your personal return in Australia. When the investment matures in 2013, you intend to bring the funds to Australia.

Reasons for decision

For the purpose of establishing residency, trusts (other than unit trusts) will be considered Australian residents in any given income year if:

· a trustee of the trust estate was a resident at any time during the year, or

· the central management and control of the trust estate was in Australia at any time during the year.

In your case, you are both the trustee of the trust and you have central management and control of the trust. Therefore, the family trust is considered to be an Australian trust for tax purposes.

The trust is required to have its own:

· tax file number (TFN), which the trustee uses in lodging income tax returns for the trust, and

· Australian business number (ABN) if carrying on a business.

· As trustee of the trust you are required to register for a TFN in your capacity as trustee.

· A trustee is required to lodge a trust income tax return, regardless of the amount of income involved, unless exempted by the Commissioner.

Invalid question

Under section 359-5 of Schedule 1 of the Tax Administration Act 1953, the Commissioner can give a private ruling on the way in which a relevant provision applies or would apply to you in relation to a specified scheme. Your question in relation to whether it is acceptable to submit financial statements from your country of origin is not in relation to a relevant provision and is invalid. However, before you calculate your income and deductions, you must convert all your foreign income, foreign deductions and foreign tax paid into Australian dollars.

The Foreign income conversion calculator found on our website, www.ato.gov.au, will assist you to convert foreign income into Australian dollars.