Edited version of private advice

Authorisation Number: 1051519786463

Date of advice: 20 May 2019

Ruling

Subject: Residency

Question 1

Are you a resident of Australia for income tax purposes?

Answer

Yes

Question 2

Are you subject to the Working Holiday Maker (WHM) rates of tax whilst on a bridging visa?

Answer

No

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Country Y.

You are a citizen of Country Y.

You arrived in Australia in the 20XX income year on a WHM visa.

You applied for a partner visa on XX XXX 20XX.

You are now on a bridging visa which commenced on XX XXXXX 20XX.

You live with your partner in Australia and you intend on making Australia your home.

You have been living with your partner in the same location since June 20XX.

You receive no income from country Y.

You have no assets in country Y.

You own a motor bike and household items in Australia.

You and your spouse are not eligible to contribute to the PSS or the CSS super funds.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 995-1(1)

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.

Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).

The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. The tests are:

¢  the resides test,

¢  the domicile test,

¢  the 183 day test, and

¢  the superannuation test.

If any one of these tests is met, an individual will be a resident of Australia for taxation purposes.

Having considered your circumstances as a whole and the relevant residency tests, you are a resident of Australia for income tax purposes. Further information on residency can be found by searching 'QC 33232' on ato.gov.au

The Working Holiday Maker (WHM) tax rates take effect during the period you are considered to be a WHM. The end of the WHM Visa marks the date new tax rates are to be applied. In this case, you are not subject to the WHM tax rates from the cessation of your WHM Visa on XX XXX 20XX.

From XX XXXX20XX the resident rates of tax apply to your income which includes the tax free threshold.

The following is the definition of a working holiday maker:

An individual is a working holiday maker at a particular time if the individual holds at that time:

(a) a Subclass 417 (Working Holiday) visa; or

(b) a Subclass 462 (Work and Holiday) visa; or

(c) a bridging visa permitting the individual to work in Australia if:

(i) the bridging visa was granted under the Migration Act 1958 in relation to an application for a visa of a kind described in paragraph (a) or (b); and

(ii) the Minister administering that Act is still to make a decision in relation to the application; and

(iii) the most recent visa, other than a bridging visa, granted under that Act to the individual was a visa of a kind described in paragraph (a) or (b)

(subsection 3A(1) of the Income Tax Rates Act 1986).