Private ruling: Residency
Date of advice: 23 August 2016
Published: September 2016
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you a non-resident of Australia for tax purposes from the date you departed Australia? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Your country of origin is Country B. You hold citizenship in both Country B and Australia. You left Australia permanently in 20XX with your children and moved to Country C due to your spouse's job. You have informed Medicare you have departed Australia permanently. You have informed your Australian private health insurance provider that you have departed Australia permanently. You have advised the Australian Electoral Commission that you have departed Australia permanently. Your property in Australia has been on the market since 20XX. You are currently leasing a property in Country C and you intend to purchase a property in Country C once your property in Australia has been sold. You owned two vehicles in Australia, one has been sold and the other was shipped to Country C. Your personal and household effects have been shipped to Country C. You have opened a bank account with a financial institution. You have joined a private health insurance provider. Your children are attending an educational facility. Your children have joined various social clubs and take music lessons. You are part of the local church and your child is celebrating an event. You have joined a gym. You are actively looking for a full time job. You are working as a volunteer and assisting an acquaintance with their new business. You and your spouse are not members of the Public Sector Superannuation Scheme or Commonwealth Superannuation Scheme.

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 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. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd 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 orusual abode, to live in or at a particular place'. In your case, there are various factors that indicate that you will not be residing in Australia during the period you are in Country C. These factors include the following: • You have a lease on a property in Country C; • Your spouse and children are living with you in Country C; • Your children are attending an educational facility in Country C; and • You intend to purchase a property in Country C once your Australian property has sold. Based on the facts of your case, the Commissioner accepts that you do not reside in Australia according to the ordinary meaning of the word; therefore, you are not a resident of Australia for taxation purposes. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia. Generally speaking, persons leaving Australia would be considered to have maintained their Australian domicile unless it is established that they have acquired a different domicile by choice or by operation of law. It is clear from the case law that a person's permanent place of abode cannot be ascertained by the application of any hard and fast rules. It is a question of fact to be determined in the light of all the circumstances of each case. The courts have considered a person's 'place of abode' is where they consider 'home'. In R v Hammond (1982) ER 1477, Lord Campbell CJ stated that "a man's residence, where he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression." In your case you intended to stay in Country C indefinitely; • You are seeking full time employment in Country C; • You have rented a home since 20XX and remained there since; • You intend to purchase a property in Country C once your property in Australia has sold; • Your children are attending an educational facility in Country C. Based on these facts, it is therefore considered that you will establish a permanent place of abode in Country C. | Detailed Reasoning - The 183-day test: Under this test, if you are actually present in Australia for more than half the income year, whether continuously or intermittently, you may be said to have a constructive residence in Australia unless it can be established that your usual place of abode is outside Australia and you have no intention to take up residence here. As you do not intend to return to Australia and be present for more than 183 days continuously or intermittently you do not meet this test. As a result, you are not a resident under this test. | Detailed Reasoning - 4. The superannuation test: You will be a resident if you are eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) or you are the spouse or child under the age of 16 years old of such a person. Generally, Commonwealth Government employees are eligible to contribute to the PSS or CSS. Neither you, nor your spouse, are contributing members of a Commonwealth Superannuation fund. Therefore, this test does not apply to you. | Detailed Reasoning - Your residency status: 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.