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This edited version has been archived due to the length of time since original publication.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: 1012931916922

Date of advice: 23 December 2015

Ruling

Subject: Assessability of Australian pension

Question and answer

Will the pension you receive be assessable in Australia?

No.

This ruling applies for the following periods:

Year ending 30 June 2016

Year ending 30 June 2017

Year ending 30 June 2018

Year ending 30 June 2019

The scheme commences on:

1 July 2015

Relevant facts and circumstances

You were a resident of Australia and were a member of your Australian employer's superannuation scheme.

You emigrated from Australia to country X and became a resident of country X for tax purposes.

You will shortly become eligible for an Australian superannuation pension.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 6-5(3)

International Tax Agreements Act 1953

Reasons for decision

Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a foreign resident includes the ordinary income derived from all Australian sources during an income year.

However, in determining liability to tax on the Australian source income of a foreign resident, it is necessary to consider not only the domestic income tax laws but also any applicable double tax agreement.

Section 4 of the International Tax Agreements Act 1953 (Agreements Act) incorporates that Act with the Income Tax Assessment Act 1936 (ITAA 1936) and the ITAA 1997 so that all three Acts are read as one. The Agreements Act overrides both the ITAA 1936 and ITAA 1997 where there are inconsistent provisions (except in some limited situations).

Section 5 of the Agreements Act states that, subject to the provisions of the Agreements Act, any provision in an Agreement listed in section 5 has the force of law

The double tax agreement between Australia and country X is listed in the Agreements Act and operates to avoid the double taxation of income received by residents of Australia and country X.

An article of the agreement with country X deals with pensions and annuities and provides that pensions (including government pensions) and annuities paid to a resident of a Contracting State shall be taxable only in that State.

Therefore, as you are a resident of country X, Australia will have no taxing rights to your pension and it will only be taxable in country X.