Edited version of private advice

Authorisation Number: 1052292256738

Date of advice: 19 August 2024

Ruling

Subject: Residency - temporary residents

Question

Are you a Temporary Resident of Australia pursuant to section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

Yes.

Section 995-1 of the ITAA 1997 states that you are a temporary resident if:

•         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

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

Under the Social Security Act 1991, an Australian resident is generally a person who resides in Australia and is either an Australian citizen or the holder of a permanent resident visa.

In your cases, from the date of your arrival in Australia, you both were not an Australian resident within the meaning of the Social Security Act 1991 as you were not an Australian citizen, the holder of a permanent visa or a protected special category visa holder.

As such, you both are a temporary resident as defined in section 995-1 of the ITAA 1997 from the date of your arrivals until you are granted a permanent resident visa or Australian citizenship. Your temporary resident status and the temporary resident rules ceased to apply to you at this time.

Subdivision 768-R of the ITAA 1997 provides that where you are a resident of Australia for taxation purposes and also meet the requirements to be a temporary resident of Australia you will be subject to the following temporary resident rules:

•         Any income you earn from an overseas 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 a capital gains tax event that relates to 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.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commences on:

XX XXXX 20XX

Relevant facts and circumstances

This ruling applies to person A and person B (jointly referred to as you).

Your country of origin is country A.

You are a country B citizen.

You are no longer a citizen of country A.

You have two dependent children.

You jointly own a bank account in country B.

You jointly own the following properties in country B:

•         Property A

•         Property B

•         Property C

•         Property D

In XXXX 20XX, you started renting out the property D to an unrelated party.

In XXXX 20XX, you started renting out the property C to an unrelated party.

In XXXX 20XX, you started renting out the property B to an unrelated party.

In XXXX 20XX, person A ceased their employment in country B.

On XX XXXX 20XX, person A moved to Australia. This is person A's date of arrival.

In XXXX 20XX, person A started a full-time permanent position with employer A in Australia.

You used property A as your main residence until you moved to Australia.

In XXXX 20XX, you started renting out property A to an unrelated party.

You still use the property A as your mailing address. The tenants collect your mail and send it to you.

In XXXX 20XX, person B ceased their employment in country B.

On XX XXXX 20XX, person B and your kids moved to Australia. This is person B's date of arrival.

The only income you received from sources overseas is from the country B rental properties.

When completing incoming and outgoing passenger cards you state you are country B residents and your address as property A.

You sold most your household and personal effects prior to arriving in Australia and brought the rest with you when you moved.

You entered Australia on a visa, issued to country B citizens arriving on a valid country B passport.

The visa allows you to stay in Australia permanently.

As a holder of the visa, you will be able to apply for Australian citizenship once you meet the following criteria:

•         have been living in Australia on a valid visa for XX years immediately before the day you apply

•         hold a permanent visa or an XXX for the last XX months immediately before the day you apply and

•         not have been absent from Australia for more than XX months in total in the past XX years, including no more than XX days in total in the XX months immediately before applying.

In XXXX 20XX, your kids started at the local public school.

In XXXX 20XX, person B started a permanent position with employer B in Australia.

You do not own any properties in Australia.

You jointly own an Australian bank account.

From XX XXXX 20XX to XX XXXX 20XX, you entered into a tenancy agreement to rent property E.

Since arriving in Australia, you have not developed any professional, social or sporting connections in Australia.

Since arriving in Australia, you did not maintain any professional, social or sporting connections in country B.

You obtained private health insurance for your family in Australia.

You have a driver's licence in both country B and Australia.

You plan on making one to two trips to country B in future years.

You will stay at an Airbnb when you visit country B.

From XX XXXX 20XX, you will reside in Australia for 183 days or more in an income year.

You are not members of a superannuation scheme established by deed under the Superannuation Act 1990 (the Public Sector Superannuation Scheme).

You are not eligible employees for the purposes of the Superannuation Act 1976 (the Commonwealth Superannuation Scheme).

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

Income Tax Assessment Act 1997 subdivision 768-R