Private ruling: Residency
Date of advice: 25 September 2018
Published: November 2018
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you an Australian resident for taxation purposes during the relevant period? | A1: No 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 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.

Relevant facts and circumstances: You are an Australian citizen. You and your spouse separated. You left Australia to live permanently overseas. You removed yourself from the Australian electoral role and advised the banks of your non-resident status. On your outgoing passenger card you put that you were leaving Australia permanently. You were not eligible to contribute to the PSS or the CSS Commonwealth superannuation funds. You gained a Country B residency visa and commenced a full-time position with a company in this country. You signed a long term accommodation lease while in Country B for the entire duration of your stay. You were employed with this overseas company up until XX/XX/20XX. Your contract was not renewed. You returned to Australia on XX September 20XX to sell your Australian property that you jointly own with your former spouse, purchase a home overseas, set up a company and contract directly to Country B. Your former spouse isn’t ready to sell the property, therefore you have decided to remain in Australia until both parties agree to sell the house.

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