Edited version of private advice

Authorisation Number: 1052345267427

Date of advice: 23 December 2024

Ruling

Subject: CGT - residency

Question 1

Are you a resident of Australia for the purpose of subsection 6(1) of the Income Tax Assessment Act 1936 from mid-20XX?

Answer 1

Yes.

For tax purposes, you are a resident of Australia if you meet at least one of the following tests. You are not a resident of Australia if you do not meet any of the tests.

•                     The resides test (otherwise known as the ordinary concepts test)

•                     The domicile test

•                     The 183-day test

•                     The Commonwealth superannuation fund test

We have considered your circumstances, and conclude that you are a resident of Australia for starting from the date you applied for your Permanent residency visa in mid-20XX, as follows:

•                     You are a resident of Australia according to the resides test.

•                     You meet the domicile test because your domicile is in Australia, and the Commissioner is not satisfied that your permanent place of abode is outside Australia.

•                     You do not meet the 183-day test in the 20XX-XX income year because you were not in Australia for 183 days or more during that income year. However, you do meet the 183-day test in the 20XX-XX income year, as you will be in Australia for 183 days or more during that income year, and the Commissioner is not satisfied that both:

­        your usual place of abode is outside Australia, and

­        you do not intend to take up residence in Australia.

­        You do not fulfill the requirements of the Commonwealth Superannuation test.

More information

For more information about residency, see Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

Question 2

Does section 855-45 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to you such that your capital gains tax (CGT) assets will be assessable under Parts 3-1 and 3-3 of the ITAA 1997 (including your foreign rental property, foreign shares and stocks, digital currency and ETF's) as if you had acquired them at the time you became an Australian resident for taxation purposes, with the first element of the cost base of your assets being the market value at that time?

Answer 2

Yes.

Section 855-45 of the ITAA 1997 applies so that that your capital gains tax (CGT) assets will be assessable under Parts 3-1 and 3-3 of the ITAA 1997 (including your foreign rental property, foreign shares and stocks, digital currency and ETF's) as if you had acquired them at the time you became an Australian resident for taxation purposes, with the first element of the cost base of your assets being their market value at that time.

This ruling applies for the following period:

Year ending 30 June 20XX>

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Country A, and you are also a citizen of Country A.

Prior to your arrival in Australia in early-to-mid 20XX, these were your travel movements:

Table 1: Travel movements

Originally, you planned to stay in Australia for a few weeks traveling and decide whether to continue travelling (in Australia and elsewhere) or decide whether you were ready to move to Australia or whether you would return to Country A and move into your jointly owned property. You shipped over a couple of suitcases.

You left the remainder of your belongings in Country A.

Since arriving in Australia in early-to-mid 20XX, you and your partner have stayed together at various Australian cities for short periods in short-term accommodation until mid-20XX, where you commenced living in permanent rental accommodation with your partner in an Australian city.

In mid-20XX you and your partner definitively decided to stay in Australia. You applied for a rental apartment on this date, and your partner prepared your permanent residency application for submission a few weeks later. Prior to this you had not decided whether you would remain living in Country A or move to Australia.

You have not left Australia since arriving on in early-to-mid 20XX.

You entered Australia on a temporary visa on in early-to-mid 20XX (when you both first arrived here). A couple of months later, in mid-20XX you applied for a permanent residency visa in Australia.

As your partner was born in Australia and is also an Australian citizen, they did not require a Visa to enable them to enter Australia.

You do not intend on leaving Australia.

You do not hold a return airline ticket to Country A.

It is yet to be determined whether you will be a tax resident of Country A for the 20XX-XX income year.

You do not have any dependents.

You have not developed any professional, social, or sporting connections in Australia.

You have not maintained any professional, social, or sporting connections in Country A.

You hold several bank accounts in Australia jointly with your partner.

Prior to coming to Australia in early-to-mid 20XX, you and your partner were renting an apartment in Country A, having signed a 12-month lease together.

You and your partner ended this rental agreement to go travelling for a few months with a view to either coming back to Country A or potentially moving to Australia.

You and your partner kept your overseas insurance (including personal effects insurance and health insurance) in place until you both decided to stay in Australia.

You and your partner only took out Australian contents and health insurance and joined Medicare after you applied for your Permanent Residency visa in mid-20XX.

You and your partner also jointly owned and have kept a house in Country A. Currently this property is rented out to tenants.

Over 95% of your assets (held jointly with your partner) are still held overseas. The only assets held in Australia are the cash deposits above. Your jointly held assets overseas include your rental property, some brokerage accounts, ETF and digital currency, shares / stocks, bank accounts, and household effects.

You and your partner receive rental income from your jointly owned Country A property - approximately AU$X per annum gross each.

You and your partner receive dividend income from Country A and Country B stocks - approximately AU$X each per annum gross each.

You and your partner receive foreign bank interest - less than $X per annum gross each.

You do not have employment in Australia or in the Country A.

You do not receive any income from any other sources.

Neither you nor your partner are a Commonwealth of Australia Government employee for superannuation (super) purposes.

You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990.

You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976.

You are not the spouse or a child under 16 of a person who is a member of the PSS or an eligible employee in respect of the CSS.

You will not be undertaking any courses of study in Australia that is more than 6 months long.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Income Tax Assessment Act 1997 section 855-45