Private ruling: Residency
Date of advice: 3 October 2017
Published: February 2018
Ruling period: Year ending 30 June 20ZZ
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: No

Relevant facts and circumstances: You and your family are from Country Y. You are currently living and working in Country Z. You and your family have been living in Country Z since 20XX. You and your spouse own properties in country Z which consist of a main residence and two rental properties. You have a permanent work contract in Country Z. Your spouse and children intend on migrating to Australia in January 20ZZ. Your spouse and children will establish a home in Australia. You will accompany them for a few weeks to find them a rental property and get them settled. You will return to Country Z to continue your work. You will visit your family in Australia every few months and you will not be in Australia for more than 50 days in a financial year. Your spouse intends on looking for work in Australia. You will not have any Australian sourced income. Neither you nor your spouse is eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(1) Detailed reasoning | Section 6 - 5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. | 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 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. | Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency. | Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.