| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1012926611756
Date of advice: 10 December 2015
Ruling
Subject: Residency
Questions and answers
1. Are you a resident of Australia for income tax purposes?
Yes.
2. Are you a temporary resident of Australia?
No.
This ruling applies for the following periods:
Year ended 30 June 2015
Year ending 30 June 2016
The scheme commences on:
1 July 2014
Relevant facts and circumstances
Your country of origin is country X.
You and your spouse were married in country X and you subsequently had a child.
Your spouse relocated to Australia for work purposes several years ago and obtained a permanent resident visa.
You recently relocated to Australia to reunite with your spouse and entered the country with a 457 sponsored temporary working visa.
You intend to live in Australia for at least several years.
You and your spouse own rental properties in joint names in Australia.
You hold a Medicare levy exemption certificate.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1)
Income Tax Assessment Act 1997 Division 768
Income Tax Assessment Act 1997 Section 995-1
Reasons for decision
Residency
The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions and provides four tests to ascertain the residency status.
The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides.
The Commissioner's view on the 'resides test' is contained in Taxation Ruling TR 98/17 Income Tax: residency status of individuals entering Australia (TR 98/17).
Paragraph 15 of TR 98/17 explains that the ordinary meaning of the word 'reside' is wide enough to encompass an individual who comes to Australia permanently (for example, a migrant) and an individual who is dwelling here for a considerable time.
As a broad principle, where a person has a settled routine for six months or more (for example, the person has stayed in one place or has been with one employer for six months at the same location) then they will satisfy the resides test.
Given your circumstances, you became a resident of Australia from when you entered Australia.
Temporary resident rules
Where you are a resident of Australia for tax purposes and also meet the requirements to be a temporary resident, your foreign income (including capital gains) is not taxed in Australia apart from income from work you do overseas while you are a temporary resident.
Section 995-1 of the ITAA 1997 states that you are a temporary resident if:
• you hold a temporary visa granted under the Migration Act 1958;
• you are not an Australian resident within the meaning of the Social Security Act 1991; and
• your spouse is not an Australian resident within the meaning of the Social Security Act 1991.
Under the Social Security Act 1991, an Australian resident is generally a person who resides in Australia and is either an Australian citizen or the holder of a permanent resident visa.
In your case, your spouse is an Australian resident within the meaning of the Social Security Act 1991 as they hold a permanent resident visa.
Therefore, you are not a temporary resident and are not subject to the temporary resident rules.