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Working Holiday Visa 417 - Intention to remain in Australia

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Hi

 

I have a client who entered Australia with a Working Holiday Visa 417 (valid for 12 months).  He came out with his partner to see if they would like to remain in Australia before taking any necessary steps to remain.  His partner came with him on a visitor's visa for 4 weeks before returning home and setting wheels in motion to return to Australia, although this took some 8-10 months to accomplish.

 

During this time my client was enrolled into an English speaking course to learn the language.  He then went to work on a farm, and successfully extended his Visa for an additional 12 months.

 

He subsequently found a job, and his employer is now currently taking steps to sponsor him to remain in Australia.  His partner has since returned to Australia having sold all their furniture and belongings and terminated the lease on their apartment. 

 

Although my client came to Australia on a Working Holiday Visa, his intention was always to try to remain in Australia with his partner.  He has been in Australia for approx 16 months.

 

So my question is, at what point will he be a regarded as being an Australian Resident for tax purposes, given he is currently here on a Working Holiday Visa until the sponsorship process is completed?

 

Thanks in advance!

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Hi @Dani1,

 

Thanks for your question!

 

@macfanboy has provided a great link, but I would suggest that example 6 may be a little bit closer to your client's circumstances. As you can see from this scenario, your client can still be considered a resident while on a working holiday maker visa. You may also wish to run through our residency tool to double check if this is the case.

 

The tricky part about this is that when he lodges his tax return he will need to declare all income that was earned while he was on a WHM visa and may be taxed at WHM rates, regardless of his residency status. His residency status will be taken into consideration once he exceeds $37,000 in earnings. So from a withholding perspective, his employer should probably continue to treat him as a WHM until his visa status changes.

 

Hope this helps,

 

Rachael B.

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Taxicorn

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Example 3?

 

https://www.ato.gov.au/Individuals/Ind/Resident-for-tax-if-WHM-/?=redirected

 

But I would still get a private ruling to support this.

 

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Hi @Dani1,

 

Thanks for your question!

 

@macfanboy has provided a great link, but I would suggest that example 6 may be a little bit closer to your client's circumstances. As you can see from this scenario, your client can still be considered a resident while on a working holiday maker visa. You may also wish to run through our residency tool to double check if this is the case.

 

The tricky part about this is that when he lodges his tax return he will need to declare all income that was earned while he was on a WHM visa and may be taxed at WHM rates, regardless of his residency status. His residency status will be taken into consideration once he exceeds $37,000 in earnings. So from a withholding perspective, his employer should probably continue to treat him as a WHM until his visa status changes.

 

Hope this helps,

 

Rachael B.

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Enthusiast

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Thank you kindly RachaelB

 

Your response was most helpful, and I was able to work through and complete our client's tax return with clarity.

 

Your assistance is greatly appreciated!

 

Keep up with great work on this forum! :-)

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Enthusiast

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Thank you kindly @RachaelB

 

Your response was most helpful, and I was able to work through and complete our client's tax return with clarity.

 

Your assistance is greatly appreciated!

 

Keep up with great work on this forum! :-)