Private ruling: Residency
Date of advice: 14 December 2017
Published: May 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

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

Relevant facts and circumstances: You were born in Country A. You are a citizen of Country B. Your spouse is a citizen of Country B. You and your spouse first arrived in Australia on several years ago. Your intention was to be living and working in Australia at that time. You worked for various employers in Australia; you also worked as a self-employed. In 201X, you and your spouse built a house in Australia which you moved into; the property was your main residence. In 201X, you and your spouse moved to Country B as your spouse found a job there. The Australian property was rented out. You also found a permanent job in Country B; you travelled between Country B and Australia for work; your spouse stayed in Country B for the whole period to provide financial support. Both of you were looking for permanent roles in Australia while in Country B. You and your spouse stayed with your parents in Country B. In 201X, you and your spouse moved back to Australia with the intention to reside in Australia permanently. You and your spouse are living in a rented property in Australia. You are employed as a full time employee in Australia. You own bank accounts in Country B. You own bank accounts and a car in Australia. You are registered with Australian professional organisations. You lodged a tax return in Country B as a resident. You and your spouse have never been Commonwealth government of Australia employees for superannuation purposes.

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

Reasons for decision: Summary: Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for taxation 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 test, ● the 183 day test, and ● the superannuation test. The first two tests are examined in detail in Taxation Ruling 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. Generally speaking, a taxpayer who leaves Australia with an intention of returning to Australia at the end of a transitory stay overseas would remain a resident of Australia for income tax purposes unless he or she can satisfy the Commissioner that a consideration of the other factors gives the conclusion that during the year of income his or her permanent place of abode was outside Australia. What constitutes a mere transitory stay overseas for these purposes would vary with the circumstances of each case. However, as a general proposition, an overseas stay for a duration of less than 2 years would be considered as being of a transitory nature. Based on the facts you have provided, you are a resident of Australia for taxation purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.