Some good news for temporary visaholders who are bothered about their tax position ...
http://www.gomatilda.com/news/article.cfm?articleid=374

These proposals are not yet law, but with a majority in the Upper House these changes are (in my view) more likely than not to come into effect from 1 July 2006.

Best regards.

Fingers crossed for us SIR holders. :sign03:
Gavin

Doesn't mention business skills visas 163/165 will they be included in this does anyone think? They grant a provisional visa for 4 years for this-no benefits etc

Yes, they could well be included ... I'm afraid the people who prepare legislation tend not to have a full understanding of all the consequences of what is being proposed, which is where the Parliamentary debate on the Bill is supposed to come into play ... though I'm afraid the MPs tend not to have a full understanding of what is being proposed either.

The consequence is usually what appear to be loopholes in the legislation - which people like you and me spot early in proceedings ... :-)

I think its a question of "watch this space" and see what transpires over the next few weeks as the Bill is read and discussed in Parliament. If you want to follow what's going on:
http://parlinfoweb.aph.gov.au/piweb/browse.aspx?NodeID=42

Best regards.

Hi Alan

Just had a look at the factsheet published on your website - a section states that income from a UK life company will still be taxable in Australia despite the new legislation (as a result of existing tax treaties).

Are you sure that this is correct? I have had a quick look at the proposed legislation and cannot see anything in regard to this. I can see that employment income is exempt from the new rules (should they pass), and various other forms of statutory and ordinary income.

I have only had a quick look at the proposals so could you direct me to the appropriate sections.

Cheers

I'm referring to pension/annuity income, Dougie, which is dealt with in the UK - Australia Tax Treaty and which is (so far as I know) unaffected by the proposed change to the legislation for temporary residents.

Does this help?

Best regards.

Hi Alan

Surely UK pension income satisfies as exempt income for the purposes of s 798-910.

I can see no relevance to the DTA or any mention of it in the proposed provisions.

Are you sure its correct?

Cheers

No, I don't think it is, Dougie ... pension income deriving from the UK is specifically assessable in Australia if the recipient is an Aussie tax resident, as per the Tax Treaty.

There are several extracts from Private Rulings on the ATO website that support this - for example:
http://www.ato.gov.au/rba/content.asp?doc=...ntent/56698.htm

What makes you think it is exempt income?

Best regards.

Hi Alan

Yes what you state is generally correct, however under the new legislation it will be exempt for temporary residents.

sec 768-910 Income derived by temporary resident

(1) The following are non-assessable non-exempt income:

(a) the ordinary income you derive directly or indirectly from a source other than an Australian source if you are a temporary resident when you derive it.......

Pension income is ordinary income and a foreign pension is not Australian sourced, therefore under the proposed section it will be exempt for temporary residents.

Cheers

Agreed - thanks for pointing that out, Dougie.

I had been reading the last sentence of para 1.22 in the Explanatory Memorandum to the Bill as applying to temporary residents, but on a re-read I can see that it probably doesn't apply:

"Further, the taxation of non-residents from countries with which Australia has tax treaties will continue to be governed by the treaties."

Best regards.

gee hope i'm not a temporary resident so long that i am drawing my pension!!!!