Edited version of private advice

Authorisation Number: 1052171417886

Date of advice: 21 September 2023

Ruling

Subject: CGT - shares

Question 1

Is the Taxpayer a temporary resident for taxation purposes in accordance with section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the 20XXX financial year?

Answer

Yes, A temporary resident is defined as follows in subsection 995-1(1) of the ITAA 1997 as a person if:

•         the person holds a temporary visa granted under the Migration Act 1958

•         the person is not an Australian resident within the meaning of the Social Security Act 1991, and

•         the person ' s spouse is not an Australian resident within the meaning of the Social Security Act 1991.

Taxation Determination (TD) 2012/18 specifically states that a Country A citizen who was present in Australia on a temporary visa is still taken to be holding a temporary visa for the purposes of the definition even when they depart then re-enter Australia.

In your case you have satisfied the above definition therefore, you are a temporary resident.

Question 2

Does section 768-915(1)(a) of the ITAA 1997 apply to disregard the capital gain from the disposal by the taxpayer of shares that were not taxable Australian property?

Answer

Yes, section 768-915 of the ITAA 1997 provides that a capital gain or capital loss made by a person from a CGT event is disregarded if the person is a temporary resident when, or immediately before, the CGT event happens, and the person would not have made a capital gain or capital loss from the CGT event or the gain or loss would have been disregarded under Division 855 of the ITAA 1997 if the person had been a foreign resident when, or immediately before, the CGT event happens.

In your case, you satisfy the requirements of a temporary resident and your shares from a non-resident company. Therefore, the gain on sale of the shares would have been disregarded under Division 855 of the ITAA 1997. This means that any gain or loss should be disregarded under section 768-915 of the ITAA 1997, your statutory income from a source other than an Australian source will be non-assessable non-exempt income.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You are a Country A citizen who holds a valid Country A passport.

In June 20XX you arrived in Australia.

You live and work in Australia and have never applied for permanent resident status or Australian Citizenship.

Since 20XX, you made several entries into and out of Australia from Country A using your Country A passport to gain entry.

Upon each entry into Australia, you were issued with a special category visa - subclass 444.

You live with your spouse who is a Country A citizen and holds a valid Country A passport.

Your spouse has never applied for permanent residence status, nor are they an Australian citizen.

You disposed of shares in Companies registered in Country A in July 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 768-915

Income Tax Assessment Act 1997 section 768-915(1)

Income Tax Assessment Act 1997 paragraph 768-915(1)(a)

Income Tax Assessment Act 1997 Division 855

Income Tax Assessment Act 1997 section 995-1

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

Migration Act 1958

Social Security Act 1991