Private ruling: Residency
Date of advice: 18 September 2017
Published: February 2018
Ruling period: Year ended 30 June 2016 | Year ended 30 June 2017
Date scheme commenced: 1 July 2015

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

Relevant facts and circumstances: You were born in Country Y. You are a citizen of Australia. You lived and worked in Australia between 200X and 200Y. You returned to Country Y to live and work in 200Y. You returned to Australia for short visits between 200Y and 201X. During the period 200Y-201X you operated a successful business in Country Y and had investments in property and development. You currently run X businesses in Country Y and have a number of rental properties. You purchased a home in Country Y a number of years ago where you are currently living. You were a non-resident of Australia for the period 200Y-201X. In the 201Z income year your spouse and children returned to Australia to live. You remained in Country Y. You spent XX days in Australia in the 201Z income year. You spent XXX days in Australia in the 20ZZ income year and this was due to your spouse being sick. You may need to relocate back to Australia in the future on a permanent basis. You and your spouse have purchased a home in Australia. You and your spouse have two rental properties in Australia. Your spouse does not work in Australia. Neither you nor your spouse are eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

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 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that 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. Section 995-1 of the 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 for the period.