Private ruling: Residency – departing Australia
Date of advice: 12 April 2018
Published: June 2018
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

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

Relevant facts and circumstances: You applied for a partner visa in an overseas country and you were granted a permanent resident visa that allows you to reside in that country for 4 years. You departed Australia during the year the scheme commenced. You reside overseas with your spouse and two children. You moved overseas so you could spend more time with your spouse’s immediate family. Your spouse was born there and is a citizen in that country. Your initial intentions were to reside overseas for one year however due to your spouse’s mother being unwell you decided to extend your stay for approximately three more years. You initially lived in a rental property however you have since purchased a property overseas in order to reduce your rental accommodation costs. Your assets overseas include – 50% ownership in motor vehicle, bank account, loan account, property valued at approximately $xxx and household effects. Prior to your departure you sold your Australian family residence. You also sold any household effects that you did not relocate overseas. You have commenced a temporary employment contract in the overseas country for 3 months. The employment contract can be extended to a permanent position however you currently have no indication as to whether this will be granted. You still receive Australian sourced income from a registered Australian Proprietary Company. In Australia you maintain a bank account, share investments and a mobile phone account. You plan to visit Australia once per year to see family or friends and to maintain some level of inclusion and relevance in your business affairs. You and your spouse are not Commonwealth Government of Australia employees. You are not a member of the superannuation scheme established under the Superannuation Act 1990 , or an ‘eligible employee’ for the purposes of the Superannuation Act 1976 .

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

Reasons for decision: Summary: 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 do 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.