Private ruling: Residency - departing Australia
Date of advice: 1 July 2016
Published: August 2016
Ruling period: Year ended 30 June 20xx
Date scheme commenced: January 20xx

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

Relevant facts and circumstances: Your country of origin is Country A. You are a citizen of both Country A and Australia. You are married with Y children. You departed Australia in January 20XX to commence work in Country A for a period of two years, which is expected to extend for a further six months. Your spouse and your children joined you soon after to enjoy a family holiday in Country A. Your spouse returned to Australia to assist one of your children prepare for university and to attend to maintenance on the family home prior to re-joining you back in Country A. Your spouse also returned to Australia on two other occasions during the year. Under company policy you and your spouse were provided with temporary accommodation in Country A for the first three months of your assignment. You then entered into a long term lease on a property in Country A until March 20ZZ. As per your work agreement you are entitled to an annual return flight to Australia which you will utilise to return for a period of up to four to five weeks over the holiday period each year. You returned to Australia for more than 30 days for the holidays. You do not intend to return to Australia at any other time during the 20VV year. You have advised the Australian Electoral Commission that you had departed Australia. You advised your Australian private health insurance provider to have your policy suspended. You completed your immigration card on departure from Australia to Country A as "Australian resident permanently departing". You also mark your immigration card on return trips to Australia as a "visitor or temporary entry". You have a family home in Australia jointly owned by yourself and your spouse. Both your children continue to reside in the family home. When you return to Australia you also reside in the family home. You have a rental property in Australia which is jointly owned by yourself and your spouse. You have kept Australian bank accounts. You have a Country A bank account which you transfer a portion of your wage into for everyday living expenses. You have kept a car in Australia for your use on your return trips to Australia. You have two cars in Country A, both in your spouse's name. You have a share portfolio. You advised your bank and your Australian share registry that you are a foreign resident. You have lodged tax returns in Country A as a non-resident. This is because you must reside in Country A for 5 years before you are considered a resident for tax purposes. Your employer continues to contribute to your Australian superannuation whilst you are on international assignment. You have a retirement annuity in Country A. You took your personal items with you to Country A. You have new social club connections in Country A. You have other family living in Country A. You are not a member of an Australian Commonwealth Government superannuation fund.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(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 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 from the date you departed Australia. You were a resident of Australia for tax purposes prior to your departure from Australia in January 20XX. You ceased being an Australian resident for tax purposes from February 20XX. You are entitled to a tax free threshold for the period you were a resident of Australia.