Private ruling: Residence
Date of advice: 15 February 2016
Published: April 2016
Ruling period: Financial year ended 30 June 2015 | Financial year ending 30 June 2016 | Financial year ending 30 June 2017 | Financial year ending 30 June 2018 | Financial year ending 30 June 2019
Date scheme commenced: 1 July 20XX

Ruling: Question and Answer | Did you cease to be an Australian resident when you left Australia in 20XX? | 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 were born outside Australia You are not an Australian citizen. You first came to Australia on vacation and ended up staying for about 30 years. You returned to your home country with your dependents. At the time of departure, you had no intention to return to Australia. Your dependents remain outside Australia. Since 20XX, you have travelled back to Australia to continue working. After your departure you made about 10 trips to Australia and spent a total of less than 5 months outside Australia. At all times you were in Australia you were working. Your dependents have not been back to Australia. While in Australia, you have lived in hotels, camp sites and other forms of temporary accommodation. You own no property in Australia. In the years preceding your departure, you always lived in rental properties. You did not notify Medicare of your departure from Australia as it did not occur to you. Prior to departure from Australia you cancelled your private health cover. When you departed Australia in, you indicated on your outgoing passenger card that you were leaving the country permanently. Prior to leaving Australia you sold most of your household items and took the remainder with you to your home country. You took all of your personal effects to your home country You are not currently contributing to a Commonwealth Superannuation fund.

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

Reasons for decision: Summary: Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes 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. The tests are: • the resides test, • the domicile (and permanent place of abode) test, • the 183 day test, and • the superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. The resides test is the primary test for determining the residency status of an individual for taxation purposes. If residency is established under the resides test, the remaining three tests do not need to be considered. However, if residency is not established under the resides test, an individual will still be a resident of Australia for taxation purposes if they meet the conditions of any one of the other three tests. | Detailed Reasoning - The resides test: The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. Because the word 'reside' is not defined in Australian taxation law, it takes its ordinary meaning for the purposes of subsection 6(1) of the ITAA 1936. In Dempsey and Commissioner of Taxation [2014] AATA 335 (29 May 2014) the Administrative Appeals Tribunal noted that the settled position of the courts (at ultimate appellant level) as to the meaning of the word resides in the ITAA 1936 is that the word: bears its ordinary English meaning, which 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 TR 98/17 considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here. In your case, you will not reside in Australia as your behaviour does not reflect the required degree of continuity, routine or habit that is consistent with residing here. This is because: • Your presence in Australia is directly linked to employment opportunities. • Your family live in outside Australia • The frequency of your journeys to Australia are regular. • When in Australia, you do not have a permanent place to live, you have no lease, you have to determine the type and location of your accommodation based on where you will work. | Detailed Reasoning - The domicile test: Under the domicile test, a person whose domicile is in Australia will be considered a resident of Australia for taxation purposes, unless the Commissioner is satisfied the person's permanent place of abode is outside Australia. A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin' and will not usually change, but can in some circumstances. For example, a person can acquire a domicile in another country by choice: but to do so, a person must have an intention to make their home indefinitely in a country outside their domicile of origin. You never took up Australian citizenship in that time. While your domicile may have changed to Australia while you were living here with your family it reverted to your home country once you returned there to live. As your domicile is not Australia you are a not a resident under this test. | Detailed Reasoning - The 183 day test: Under the 183 day test, a person will be a resident of Australia if they are present in Australia for 183 days during the year of income, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. As the Commissioner is satisfied your usual place of abode is outside Australia, you are not a resident under the 183 day test. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident of Australia if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) of the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS. As you and your spouse do not meet the above conditions you are not a resident under this test.