Private ruling: Residency status
Published: February 2012
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2008

Ruling: Question and answer | Were you a resident of Australia for tax purposes for the 2008-09, 2009-10 and 2010-11 income years? | Yes

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a citizen of Australia and another country. Your country of origin is not Australia. Your home country is Australia. You do not work for any Australian Commonwealth agencies. You have been working for a foreign company for several years. Your employer sends you to different places overseas for work purposes. You receive your earnings in a foreign currency which is paid into an Australian bank account. You return to Australia at the end of each contract. Periods away from Australia in foreign countries range from 5 weeks to 5 months. Each income year you have been outside of Australia for over 183 days. Your travel has been organised and paid for by foreign companies. Your family members in Australia are your parents and siblings. You do not own any assets overseas. Your assets in Australia are a house and furniture of which you are a joint owner. You own a motor vehicle. When you return to Australia you have been staying in the house which you jointly share. Your joined owner lives in the house when you are away. When working overseas you stay in maritime vessels. You do not have any social and sporting commitments with any overseas country other than colleagues and acquaintances. You do not have any social and sporting commitments with Australia other than colleagues and acquaintances. You did not earn any income from Australia for the period 1 July 2008 to 30 June 2011. You do not intend to immigrate overseas in the near future.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). | Income Tax Assessment Act 1997 Section 995-1.

Reasons for decision: Summary: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose of the Income Tax Assessment Act 1936 (ITAA 1936). The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. 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. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident for tax purposes if they satisfy the conditions of one of the three other tests. | Detailed Reasoning - The resides test: The ordinary meaning of the word reside, according to the dictionary meaning, 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. As you resided overseas intermittently between 1 July 2008 and 30 June 2011, your behaviour was not consistent with a person who lives in Australia. Thus you were not a resident of Australia for taxation purposes under the resides test. | Detailed Reasoning - The domicile test: If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country. In your case you are an Australian citizen and have indicated that your home country is Australia, You do not intend to immigrate overseas in the near future. Therefore you have maintained your Australian domicile. | Detailed Reasoning - Permanent place of abode: The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives. A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere. Income tax ruling IT 2650 gives guidance as to whether a person has set up a permanent place of abode overseas. Paragraph 28 of the ruling states: The fact that an individual has established his or her home (in the sense of a dwelling place; a house or other shelter that is the fixed residence of a person, family or household) in an overseas country would tend to show that the place of abode in the overseas country is permanent. Acquisition of a home in the overseas country would be a very relevant though not conclusive factor. On the other hand, individuals or a family group who "make do" in temporary accommodation with limited resources and facilities such as in barracks, singles' quarters, aboard ships, oil rigs, or mining towns, will be less likely to be considered to have established a permanent place of abode overseas. For the period 1 July 2008 until 30 June 2011, you were working overseas, staying in maritime vessels which is considered to be temporary accommodation and thus you did not have a permanent place of abode overseas. In addition, your associations with Australia have been more significant as: · You have family members in Australia including your parents and siblings. · You do not own any assets overseas. · Your assets in Australia are a house and furniture of which you are a joint owner. You own a motor vehicle. · You return to Australia at the end of each contract. · When you return to Australia you have been staying in the house which you jointly share. · Your joined owner lives in the house when you are away. · You do not have any social and sporting commitments with any overseas country other than colleagues and acquaintances. Based on these facts, you did not establish a permanent place of abode outside Australia for the period 1 July 2008 to 30 June 2011. Therefore you were an Australian resident under the domicile test. We have noted that you were not present in Australia for more than 183 days in each year and that you have not worked for any Australian Commonwealth agency. As you were a resident of Australia under the domicile test, it is not necessary to consider the other two residency tests. Your residency status from 1 July 2008 until 30 June 2011 You were an Australian resident for tax purposes for the period 1 July 2008 to 30 June 2011 under the domicile test of residency outlined in subsection 6(1) of the ITAA 1936.

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.