Private ruling: Residency
Published: September 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you a resident of Australia for tax purposes? | A1: Yes.



Reasons for decision: Summary: The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) and sub section 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: · the resides test · the domicile test · the 183 day test · the superannuation test. The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established. The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia emphasises the intended and actual length of the individual's stay in an overseas country, any intention to return to Australia or travel elsewhere, the establishment or abandonment of any residence, and the durability of association that the individual maintains with a particular place in Australia as the main factors to be considered when determining the residency status of individuals leaving Australia. In the recent AAT case of Iyengar v FC of T [2011] AATA 856, the tribunal found that a taxpayer working in the Middle East for a number of years, only returning to Australia for short periods to see his wife and children, was a resident of Australia for tax purposes under the resides test due to his family ties, his intention to complete his work contract, his motive to pay off his mortgage, and his maintaining an Australian place of abode while overseas. In your case, you work, rent a house and maintain a bank account in country B. However, your family, including your spouse and children, remain in Australia when you are in country B. You own property and have retained all your assets in Australia. You return to Australia regularly to be with your family and you have a home to return to when you are in Australia where your spouse also lives. The facts of your case show that you have ties to both country B and Australia, however, your ties to Australia are greater than those to country B, as your purpose of being in country B is for work, you have maintained your home in Australia and your immediate family have remained in Australia. As you have passed one of the tests of residency, we do not need to consider the remaining tests. You are a resident under the resides test and so meet the definition of resident of Australia for tax purposes under subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: From mid 2011 to early 2012 you travelled extensively with your job and were only in Australia for a short time. | In early 2012 you relocated to country B where you began a new job. | In country B you rent a house, have an active bank account, and have become a member of a sporting association. | You have an employment contract with your employer under which you may transfer to Australia or another global operation if required. | You own a property in Australia where your spouse and family live. | You have retained all your assets in Australia. | You and your spouse have never been a Commonwealth Government of Australia employee. | Relevant legislative provisions | Income Tax Assessment Act 1936 Subsection 6(1). | Income Tax Assessment Act 1997 Subsection 995-1(1).