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This edited version has been archived due to the length of time since original publication.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

Authorisation Number: 1051597651923

Date of advice: 22 October 2019

Ruling

Subject: Foreign income of a temporary resident

Question 1

Are you a temporary resident for Australian tax purposes?

Answer

Yes

Question 2

Is the foreign pension, interest and investment income you derive as a temporary resident subject to tax in Australia?

Answer

No

This ruling applies for the following periods:

Year ending 30 June 2019

Year ending 30 June 2020

Year ending 30 June 2021

The scheme commences on:

1 July 2018

Relevant facts and circumstances

You relocated to Australia from a foreign country with your spouse.

Your spouse holds a temporary work visa and you hold a temporary resident spouse visa.

Neither you nor your spouse has ever been an Australian citizen or a permanent resident of Australia.

You are a resident of Australia for tax purposes.

You receive a foreign pension and earn foreign interest.

You own a foreign employee provident fund that you have not made any withdrawals from.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 768-910

Income Tax Assessment Act 1997 Section 768-915

Income Tax Assessment Act 1997 Section 995-1

Reasons for decision

Temporary resident

You are a temporary resident if you:

·  hold a temporary visa granted under the Migration Act 1958

·  are not an Australian resident within the meaning of the Social Security Act 1991, and

·  do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991.

The Social Security Act 1991 defines an Australian resident as a person who resides in Australia and is an Australian citizen, the holder of a permanent visa, or a protected special category visa holder.

In your case, you are not an Australian resident within the meaning of the Social Security Act 1991 as you are not an Australian citizen, the holder of a permanent visa, or a protected special category visa holder.

You are a temporary resident because:

·  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

·  you do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991.

Income derived as a temporary resident

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, subdivision 768-R of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are in Australia and are a temporary resident, you will be subject to the following temporary resident rules:

·  Any income you earn from a foreign source will not be taxed in Australia, except income earned from employment performed overseas for short periods while you are a temporary resident.

·  Any capital gain you make from the disposal of an asset that is not taxable Australian property will not be taxed in Australia.

·  Special rules apply to capital gains on shares and rights acquired under employee share schemes.

In your case, as a temporary resident, your foreign pension, interest and investment income is not subject to tax in Australia and does not have to be included in an Australian income tax return.