Private ruling: Residency for tax purposes
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Question and answer | Are you a resident of Australia for taxation purposes from when you left Australia to live and work overseas? | No.

Relevant facts and circumstances: You are a citizen of both Australia and Country X. You were born in Australia. You left Australia to live and work in Country Y. You intend to live and work in Country Y indefinitely. Your current work contract is for a number of years. You are renting a property overseas. You have a bank account overseas. You have no assets in Australia. You ceased employment in Australia. The Commonwealth super test does not apply to you or your spouse.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). | Income tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1997 Subsection 995-1(1).

Reasons for decision: Summary: To understand your tax situation, you must first work out whether you are an Australian resident for tax purposes. Australian residents are generally taxed on their worldwide income and non-residents are generally taxed only on their Australian-sourced income. The definition of 'resident' within tax law provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: 1. the resides test 2. the domicile test 3. the 183 day test 4. the superannuation test You do not meet any of the above tests and are not considered a resident of Australia for tax purposes from when you left Australia. You are not required to declare your income derived in Country Y in your Australian tax return. You are required to declare your Australian income up until you ceased your employment in Australia in your Australian tax return. The factsheet Residency - what you need to know provides details of the above residency tests and may be obtained from our website www.ato.gov.au .

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.