ATO Interpretative Decision

ATO ID 2001/224 (Withdrawn)

Income Tax

Rental Income of Non-Resident
FOI status: may be released

This ATO ID is withdrawn. Guidance on the issue contained in this ATO ID can be found at Owning real property in Australia. (QC33223)

This document has changed over time. View its history.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Whether the income derived by the taxpayer, a non-resident of Australia, from a rental property located in Australia is assessable pursuant to subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997).

Decision

Yes, the taxpayer is assessable on the rental property income under subsection 6-5(3) of the ITAA 1997.

Facts

The taxpayer is a non-resident of Australia for taxation purposes and owns a residential property in Australia from which he derives rental income.

Reasons for Decision

Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that if you are not a resident of Australia for taxation purposes your assessable income includes the ordinary income you derived directly or indirectly from all sources within Australia during the income year.

Income derived from the letting or renting of a residential property is ordinary income, that is, income according to ordinary concepts.

As a non-resident, the taxpayer is therefore assessable on the rental income derived in Australia.

This is also consistent with Australia's Double Tax Agreements with other countries under which income from real property may be taxed in the country in which the property is situated.

Date of decision: 1 June 2001

Legislative References:
Income Tax Assessment Act 1997
subsection 6-5(3)

International Tax Agreements Act 1953
The Act

Keywords
Non resident individuals
Rental property income

Business Line: Small Business/Individual Taxpayers

Date of publication: 21 August 2001

ISSN: 1445-2782

history

	Date:	Version:
	1 June 2001	Original statement
You are here	22 September 2017	Archived

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