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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.