Private ruling: Residency for tax purposes
Published: July 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 1 July 2012

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

Relevant facts and circumstances: You were born overseas You are a citizen of the overseas country and Australia. You intend to return to your country of birth for a holiday. You will stay with family while you are overseas. Your spouse will accompany you overseas. Your children will remain in Australia. You will rent out your home in Australia and will stay with your children when you return for the 1-2 months of the year. You do not have any assets overseas. You do not intend to live overseas on a permanent basis. The purpose of going overseas is to see more of your country of birth as you are getting older and you want to do this before you get too old. You will continue with your social and sporting connections in Australia. Neither you nor your spouse has ever been a Commonwealth Government employee.

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: Generally 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. The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions and provides four tests to ascertain the residency status. Relevant to your situation are the first two tests which are examined in detail in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia. In examining these tests, IT 2650 provides a number of factors which assist in assessing a taxpayer's situation against the tests. A copy of this ruling is available from www.ato.gov.au. | Detailed Reasoning - The resides test: Whether the individual resides in Australia according to the ordinary meaning of the word resides. In your case, you are going to be visiting an overseas country on a holiday. You will be staying with family while you are overseas. You do not intend to live on a permanent basis overseas. Your ties to Australia are closer than to the overseas country as your children are in Australia and you will maintain your home in Australia. Based on these facts, you are residing in Australia according to the ordinary meaning of the word. Therefore, you meet the 'resides test' and are a resident of Australia for tax 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. Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence. Your domicile is Australia. In your case the Commissioner is not satisfied that you have a permanent place of abode outside of Australia because: You are going overseas on a holiday You maintain a home in Australia You do not intend to live overseas on a permanent basis Therefore, you are a resident of Australia under this test. | Detailed Reasoning - Your residency status: As you meet the resides and domicile tests, you are considered to be a resident of Australia for tax purposes for the period you are on holiday in the overseas country.

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.