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Edited version of your written advice
Authorisation Number: 1051421443502
Date of advice: 27 August 2018
Ruling
Subject: Temporary resident and foreign source investment income
Question 1
Are you a temporary resident of Australia for taxation purposes?
Answer
Yes
Question 2
Will your foreign investment income be assessable in Australia for the period that you are a temporary resident of Australia for taxation purposes?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You hold a temporary visa granted under the Migration Act 1958 which expires in 20XX.
You are not an Australian citizen.
You and your spouse are not residents of Australia for the purposes of the Social Security Act 1991.
You have derived foreign investment income.
Relevant legislative provisions
Income Tax Assessment Act 1997– Section 995-1
Income Tax Assessment Act 1997 Section 768-910.
Income Tax Assessment Act 1997 Section 768-915.
Reasons for decision
Question 1
Temporary residency
A temporary resident is defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as 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.
In your case:
● you hold a temporary visa granted under the Migration Act 1958 until 22 March 2020.
● you are not an Australian resident within the meaning of the Social Security Act 1991
● you do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991.
Therefore you are a Temporary resident of Australia for taxation purposes.
Question 2
Foreign income received as a temporary resident
From 1 July 2006, taxpayers who are temporary residents do 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.
Therefore, any foreign sourced investment income you have derived during the period that you are a temporary resident is exempt from income tax in Australia under section 768-910 of the ITAA 1997.