Question

RESIDENCY Graeme arrived in Australia from the United Kingdom on 1 October 2018 with the intention...

RESIDENCY

Graeme arrived in Australia from the United Kingdom on 1 October 2018 with the intention of remaining permanently.

Based on his circumstances you have determined he is a resident for tax purposes, but he is currently on a temporary visa.

Which of the following types of income must he include in his Australian tax return?

Wages earned in the UK prior to arriving in Australia

Interest on a bank account in the UK, prior 1 October 2018

Interest earned on a bank account in the UK after 1 October 2018

UK Social Security Pension commenced on 1 May 2019

Interest on a bank account in Australia, earned after 1 October 2018

Hint: 1 Correct answer (s)

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Homework Answers

Answer #1

The correct answer is : Interest on bank account in Australia, earned after 1 October 2018 will be taxed.

Explanation:

Graeme is temporary resident in Australia.

Explanation: The ATO states that a temporary resident is one who:

  • Has temporary visa granted under the Migration Act 1958.
  • Who is not an Australian resident .
  • Whose spouse is not an Australian resident within the meaning of Social Security Act 1981.

Temporary residents are taxed only on the Australian source of income. As Graeme is a temporary resident, only his Australian source of income will be taxed.

Thus, Interest on bank account in Australia, earned after 1 October 2018 will be taxed.

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