Private ruling: Residency for tax purposes
Published: June 2012
Ruling period: Year ended 30 June 1999 | Year ended 30 June 2000 | Year ended 30 June 2001 | Year ended 30 June 2002 | Year ended 30 June 2003 | Year ended 30 June 2004 | Year ended 30 June 2005 | Year ended 30 June 2006 | Year ended 30 June 2007 | Year ended 30 June 2008 | Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 1998

Ruling: Question and answer | Are you a resident of Australia for tax purposes? | Yes.

Relevant facts and circumstances: You are a citizen of Australia. You were born in Australia. A number of years ago you went for a short period to work in Country Y. Your spouse accompanied you to Country Y and returned to Australia on a regular basis. You terminated this employment and returned to Australia a short time later. You then took up a position in Country Z and you moved to Country Z in after 1 January 1999. Your spouse did not go overseas with you and chooses to stay in Australia due to personal reasons. While in Country Z you stayed in accommodation that was paid for by your employer. While initially offered apartment accommodation by your employer, you chose to reside in hotels in Country Z (to save costs for your employer those days you were travelling to other cities). Your position was relocated to Country X. You stayed in hotel style accommodation during your relocation. You have continued to move around many countries for your work. You have had multiple visas. You purchased a property in Australia a number of years ago which is your only Australian property. You visit the property a number of times each year. You stay at your spouse's home and at your property when you return to Australia. You financially support your spouse as your spouse looks after your property etc. Your spouse visits you overseas a few times each year. Neither you, nor your spouse, have ever been Commonwealth Government employees.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 6-1 | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 995

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 first two tests are examined in detail in Taxation Ruling IT 2650. 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. 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 Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), 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'. In your case, you have performed your employment duties in multiple countries around the world for a number of years. You have moved around with your work and have predominantly stayed in hotel style temporary accommodation. Your spouse has remained in Australia for the majority of the time you have been overseas. Your spouse visits you a few times each year when you are working overseas. You return to Australia a number of times each year to see to your property and in addition to this you visit your child and spend time with your spouse. You financially support your spouse in Australia Although your employment duties are based overseas and you spend considerable time outside of Australia, your ties to Australia are stronger than that of any other country, as your spouse remains in Australia, your child is in Australia and you have a home in Australia. Furthermore, you have not established a home outside of Australia, rather, you stay in temporary accommodation such as hotels and serviced apartments. Therefore, you are residing in Australia according to ordinary concepts. As you therefore meet the resides test, you are a resident of Australia for tax purposes. | Detailed Reasoning - The domicile test: If a person has 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. | Detailed Reasoning - Domicile: There are essentially 3 types of domicile that an individual can have: · the domicile of origin; · the domicile of choice; and · The domicile of dependency. Basically, the domicile of origin of an individual is where the individual was born. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country. In relation to domicile of dependency, such a domicile will normally only exist in relation to minors or individuals who are of unsound mind. In your case, you were born in Australia and are a citizen of Australia; therefore, your domicile of origin is Australia. Although you have been working overseas for a number of years, you do not have permanent residency or citizenship of any other country. You have not shown any intention to make another country your home indefinitely and therefore your domicile remains Australia. As your domicile is Australia, you will be a resident of Australia for tax purposes unless the Commissioner is satisfied that you have a permanent place of abode outside of Australia. | 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. The Commissioner is not satisfied that you have established a permanent place of abode outside Australia as you stay in temporary accommodation provided to you by your employer when you are overseas. You have not set up a home outside of Australia. Therefore you are a resident under the domicile test. | Detailed Reasoning - The 183 day test: Under the 183 day test, a person is a resident of Australia if they are actually physically present in Australia for more than 183 days in an income year unless the Commissioner is satisfied that their usual permanent of abode is outside of Australia and they have no intention of taking up residence here. This test does not apply to you as you were not physically present in Australia for more than 183 days in any income year. | Detailed Reasoning - The superannuation test: A person will be considered a resident under the Commonwealth superannuation fund test if they currently contribute to certain superannuation funds for Commonwealth government employees. This test does not apply to you, as neither you, nor your spouse, have ever been Commonwealth government employees. | Detailed Reasoning - Your residency status: You are a resident of Australia for taxation purposes as you meet the resides and domicile tests. As you are a resident of Australia, according to section 6-5 of the ITAA 1997, your assessable income includes income gained from all sources, whether in or out of Australia.

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.