Private ruling: Residency
Published: October 2013

Ruling: Question and answer | Are you a resident of Australia for taxation purposes? | No. | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | 1 July 2013

Relevant facts and circumstances: You are a citizen of Australia. You left Australia six years ago to live and work in country X. You have indefinite employment with your country X employer. You intend to live in country X permanently. You have purchased a residential apartment in country X. You live with your de facto spouse and intend to marry shortly. You state that you will gain permanent residency status of country X next year. You will not need a visa from the time you become a permanent resident. Your assets in country X include your apartment, furniture and bank accounts. The only asset you have in Australia is a bank account. You have no place of abode in Australia. You have had your name removed from the Australian electoral roll. You cancelled your Australian private health insurance. You have not had your name removed from Medicare records.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). | Income tax Assessment Act 1997 Section 6-5.

Reasons for decision: Summary: The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (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 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 a resident of Australia for tax purposes if they meet the conditions of one of the other three tests. | 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 or usual abode, to live in or at a particular place'. In your case, you have been living and working in country X for some years and intend to live there permanently. You live with your de facto spouse in an apartment you purchased in country X. You are not residing in Australia according to the ordinary meaning of the word and are not a resident under this test. | 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. Domicile is a legal concept, determined according to the Domicile Act 1982 and common law rules established by private international law cases. Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence. 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. In your case, your country of origin is Australia and you are an Australian citizen. However, you intend to live in country X permanently with your partner, have purchased an apartment in that country and will be eligible for permanent residency status next year. Therefore, you have adopted a domicile of choice in country X and are not a resident of Australia under this test. | 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 place of abode is outside of Australia and they have no intention of taking up residence here. As you have not been physically present in Australia for more than 183 days in any year since you left Australia, you are not a resident under this test. | Detailed Reasoning - The superannuation test: An individual is considered to be an Australian resident for income tax purposes if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. You are not a resident under this test as you have never been employed by the Australian commonwealth government and are not eligible to contribute to the PSS or the CSS. | Summary: As you are not an Australian resident under any of the tests of residency, you are not an Australian resident for taxation purposes.