Edited version of your written advice

Authorisation Number: 1051494473134

Date of advice: 15 March 2019

Ruling

Subject: Pension/Annuities – Australian sourced to Country A resident

Question

Is your ComSuper pension assessable in Australia?

Answer

No

This ruling applies for the following period:

Year ended 30 June 2018

The scheme commences on:

1 July 2017

Relevant facts and circumstances

1. You are a non-resident of Australia.

2. You are a resident of the Country A for tax purposes.

3. You returned to the Country A in 200X.

4. You are in receipt of a superannuation pension from Australia.

5. You declare this income in Country A and pay tax on it.

6. There is an international tax agreement between Australia and the Country A

Relevant legislative provisions

Income tax Assessment Act 1997 subsection 6-5(3)

Income tax Assessment Act 1997 subsection 6-10(5)

Income tax Assessment Act 1997 section 10-5

Income tax Assessment Act 1936 section 27H

International Tax Agreements Act 1953 section 4

International Tax Agreements Act 1953, Schedule 1, Article 17(1)

Reasons for decision

Summary

Your Australian superannuation pension is not assessable in Australia.

Detailed reasoning

Assessable income in Australia

Subsection 6-5 (3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that ordinary income derived by a foreign resident directly or indirectly from Australian sources, as well as other ordinary income included by a provision on a basis other than having an Australian source, is assessable. Statutory income from all Australian sources, or included by a provision on a basis other than having an Australian source, is also included in a foreign resident's assessable income under subsection 6-10(5) of the ITAA 1997.

Section 10-5 of the ITAA 1997 lists those provisions about assessable income. Included in this list is section 27H of the Income Tax Assessment Act 1936 (ITAA 1936) which provides that annuities and superannuation pensions are included in assessable income.

In determining liability to Australian tax on Australian sourced income received by a foreign resident it is necessary to consider not only the income tax laws but also any applicable tax treaty contained in the International Tax Agreements Act 1953 (the Agreements Act).

Double tax agreement with United Kingdom

Schedule 1 of the Agreements Act contains the 2003 Country A Convention and Notes, operative from 1 July 2004, (the Country A Convention). The Country A Convention operates to avoid the double taxation of income received by Australian and Country A residents.

Article 17 of the Country A Convention deals with pensions and annuities. Paragraph (1) of Article 17 provides that an Australian sourced pension paid to an individual who is a resident of Country A shall be exempt from tax in Australia.

Section 4 of the Agreements Act incorporates that Act with the ITAA 1936 and ITAA 1997 so that those Acts are read as one. The Agreements Act effectively overrides the ITAA 1936 and the ITAA 1997 where there are inconsistent provisions (except for some limited provisions).

Conclusion

In your case, you ceased to be a resident of Australia for tax purposes in 200X and became a resident of Country A. Accordingly, your Australian sourced superannuation pension ceased to be assessable in Australia from that date. All payments of the pension you receive from then on are assessable in Country A only and this situation will remain so whilst you continue to be a resident of Country A for tax purposes.