Edited version of private advice

Authorisation Number: 1052318506271

Date of advice: 22 October 2024

Ruling

Subject: Temporary residency

Question 1

Are you a temporary resident of Australia for income tax purposes?

Answer

Yes.

Question 2

Is your foreign source income and capital gains assessable in Australia?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2025

Year ended 30 June 2026

Year ended 30 June 2027

Year ended 30 June 2028

The scheme commenced on:

1 July 2024

Relevant facts and circumstances

You are currently a non-resident of Australia for tax purposes.

You have never resided in Australia and are not an Australian citizen or an Australian permanent resident.

You currently reside in the foreign country A. You have resided there with your family for the past X years.

You were born in foreign country B and are a citizen of foreign country B.

You and your family also hold foreign country C passports and foreign country A residency visas.

You have a spouse and children.

You will relocate to Australia with your spouse so that you can support your children with their education in Australia.

You and your family will enter Australia with your foreign country B passport and be issued a visa. The visa is a temporary visa for Australian migration purposes.

Your spouse is not an Australian citizen or Australian permanent resident. They are also a foreign country B citizen and will enter Australia on the same type of visa.

You are a shareholder of a foreign company. The majority of the company's directors and shareholders reside outside of Australia. The central management and control of the company is not carried out from Australia. The company does not a permanent establishment in Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 768-910

Income Tax Assessment Act 1997 Section 768-915

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

Reasons for decision

Temporary residency

Question 1

Are you a temporary resident of Australia for income tax purposes?

Question 2

Is your foreign source income and capital gains assessable in Australia?

Summary

You are a temporary resident of Australia for income tax purposes. Therefore, you are not assessable in Australia on foreign source income and capital gains.

Detailed reasoning

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.

In your case 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.

You are a Temporary resident of Australia for taxation purposes.

Assessable income of a temporary resident

Section 768-910 of the ITAA 1997 provides that the assessable income of a temporary resident of Australia includes only income derived in Australia during the income year. This means that your income from foreign sources is not assessable in Australia as you are a temporary resident.

Section 768-915 of the ITAA 1997 provides that the capital gain or loss you make from a CGT event is disregarded if you are a temporary resident of Australia unless the relevant CGT asset is a direct or indirect interest in Australian real property.

As you are a temporary resident of Australia for taxation purposes for the relevant period, any foreign source dividend income will be exempt from income tax in Australia. You can also disregard a capital gain or capital loss in respect of a CGT event in relation to your shares.