Private ruling: Residency status
Published: June 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2012

Ruling: Question and answer: | Are you a resident of Australia for income tax purposes? | No.


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

Reasons for decision: Summary: An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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. These tests are: · the resides test · the domicile test · the 183 day test · the superannuation test. The first two tests are examined in detail in Taxation Ruling IT 2650: Residency - Permanent Place Of Abode Outside Australia . The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for tax purposes if they satisfy the conditions of one of the other three tests. | Detailed Reasoning - The resides test: The first question to be asked in considering the residency status of a person is whether he or she can be considered to reside in Australia. If the test of residence according to ordinary concepts is satisfied, there is no need to apply any of the other tests. The person is a resident of Australia for income tax purposes. The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3rd 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 or usual abode, to live in or at a particular place'. You left Australia with your dependants to assist them in adjusting to life in country T. Since departing you have only return to Australia on 1 occasion for a short period. It is your intension to remain in country T for a number of years. As you will not be physical in Australia, you will not be considered to be residing in Australia according to ordinary concepts under this test, until your return to Australia. Accordingly, you are not a resident of Australia under the 'resides test' in the income years included in this ruling. | Detailed Reasoning - The domicile test: If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. In order to show that an individual's domicile of choice has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country. From the information that you have provided, you were born in country Z, therefore your domicile of origin is country Z. However you then moved to Australia and became an Australian citizen, electing Australia as your domicile of choice. You then gained permanent country T residency before travelling country T, therefore adopting country T as your domicile of choice. Accordingly, as country is now your domicile of choice, you are not a resident of Australia for income tax purposes under the domicile test for the years included in this ruling. | Detailed Reasoning - The 183 day test: Under the 183 day test, a person is a resident of Australia if they are actually physically present in Australia for more than 183 days in an income year unless the Commissioner is satisfied that their usual permanent of abode is outside of Australia and they have no intention of taking up residence here. From the information that you have provided you will not be physically in Australia for a period greater than 183 days in the income years included in this ruling. Therefore, you are not a resident of Australia under the 183 day test for this period. | Detailed Reasoning - The superannuation test: An individual is considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS. Neither you nor your spouse has been an employee of the Commonwealth Government of Australia. Therefore neither of you are eligible to be a member of either the PSS or CSS superannuation schemes. Accordingly, you are not a resident of Australia under the superannuation test. | Detailed Reasoning - Your residency status: Accordingly you will not be a resident of Australia for the years included in this ruling, under subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997.

You are a citizen of both Australia and country W. | You have a spouse and dependants. | Your spouse lives in the country T. | You were granted permanent residency by country T. | Shortly after you departed Australia for country T with your dependants. | The purpose of your trip to country T was to accompany your dependants to their other parent (your spouse) and help them to settle in country T. | You initially intended to stay in country T for a short period and return to Australia, however as your dependants had not settled in country T you delayed your return. | After a period you returned to Australia for the purpose of preparing your home in Australia to be a rental property. You returned to country T after a brief period. | While in country T your spouse began legal proceedings against their employer in country T. | Due to the legal proceedings that were taking place you further extended your stay in country T. | Your spouse's legal proceedings reached settlement after an extended period. | After settlement your spouse was moved to nightshift, this change lead to another extension of your stay in country T, as your dependants were still in need of care. | You have not been employed in country T, as you have been unable to find employment | You have not received any social security benefits from the country T authorities. | While in country T you have been living with your spouse and dependants in your spouse's home. | Prior to your departure from Australia you lived in your Australian home. | The assets that you hold in Australia consist of; | You do not own any assets in country T. | The social and sporting ties that you have in Australia consist of relatives and friends. | You do not have any social or sporting ties in country T. | You have remained on the Australian electoral role. | Neither you nor your spouse has been a Commonwealth Government of Australia employee. | You do not intend to return to Australia for a number of years.