Private ruling: Your residency status
Published: August 2017
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019
Date scheme commenced: 1 August 2016

Ruling: Question and answer: | Are you a resident of Australia for income tax purposes? | No.

Relevant facts and circumstances: You were born in Australia and are a citizen of Australia. You have a spouse and no dependants. You left Australia to gain international work experience and undertake overseas travel opportunities. You entered Country Y on a visa that allowed you to remain in Country Y for a number of years. For a period you worked and travelled around Country Y. After a number of years you were successful in applying for a more permanent employment in Country S. Your employment is such that it can be extended. You continued to travel in Country T and Country S until your employment commenced in Country S. After your travels you commenced employment in Country S. While living in Country S you are living in long term rental accommodation with your spouse. Prior to leaving Australia you were living with in a rented apartment with your ex-spouse. Since your departure you have returned to Australia for short periods on a number of occasions. On each occasion the purpose of your trip was to visit family and friends. When you returned to Australia you stayed with your parents. Your overseas assets consist of a bank account, computer, basic kitchen goods (e.g cutlery, pots and pans etc), bedding, towels and stereo. Your assets in Australia consist of household furniture, electrical and white goods and a motor vehicle. All these assets are currently in storage. Your Australian sporting and social ties consist of sporting club membership and a network of friends. You separated from your ex-spouse, who originally accompanied you to Country Y. After this separation you entered into a relationship with a Country S national while living and working in Country S. Your overseas sporting and social ties consist of playing competition sport and gym membership. You have a sibling living in Country Y. You and your spouse have never been employees of the Commonwealth Government of Australia. You intend to return to Australia in a number of years.

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

Reasons for decision: Summary: Section 995-1 of the 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. The first two tests are examined in detail in TAXATION RULING NO. IT 2650 INCOME TAX: Residency - Permanent Place of Abode Outside Australia . The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. | Detailed Reasoning - Your circumstances: From the information that you have provided, you have lived and worked in Country S. Notwithstanding the fact that your Australian domicile may have changed due to your new spouse being a Country S national, during this period you have lived in long term rental accommodation with your spouse, purchased household items and established social and sporting ties. Therefore, the Commissioner is satisfied that you have established a permanent place of abode outside of Australia. Further you will not have been in Australia for a period of greater than 183 for any of the income years contained within this ruling and have never worked for the Commonwealth Government of Australia. Therefore, based on the above you will not satisfy any of the 4 residency tests. | Detailed Reasoning - Your residency status: As you are not a resident of Australia under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997, you are not an Australian resident for income tax purposes.