Private ruling: Residency for tax purposes
Published: April 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ending 30 June 2012
Date scheme commenced: 1 July 2009

Ruling: Question and answer | Were you a resident of Australia for taxation purposes for the duration of your time in Australia? | Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You were born overseas and are a citizen of an overseas country. You came to Australia with your family to live. Your spouse commenced work in Australia. After being in Australia for a period of time your spouse realised that they would need to return overseas to continue the work. You and your spouse moved between Australia and an overseas country. You purchased a house in Australia soon after you arrived in Australia. Your children commenced their schooling. You have social connections in Australia. Recently you moved overseas and purchased a home their. You do not intend to return to Australia to live only for holidays. Neither you nor your spouse have been or are currently Commonwealth government employees.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 6-1

Reasons for decision: Summary: The terms resident and resident of Australia, in regard to an individual, are explained in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The legislation lists four tests which will help us ascertain whether you were a resident of Australia for income tax purposes for the duration of your time in Australia. These tests are: (I) residence according to ordinary concepts; (ii) The domicile/permanent place of abode test; (iii) The 183 days/usual place of abode test; and (iv) The Commonwealth superannuation test. The primary test for deciding your residency status is whether you lived in Australia according to the ordinary meaning of the word resides. However, where you do not reside in Australia according to ordinary concepts, you may still be considered to be a resident of Australia for tax purposes if you satisfy 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'. Another reference is Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia which discusses the Commissioner's interpretation on the residency status of individuals entering Australia. These are available for viewing in total on our website www.ato.gov.au. Generally the Commissioner regards six months or 183 days as a considerable time when deciding an individual's behaviour is consistent with residing here. The Commissioner is also of the view that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here. The following factors assist in identifying the quality and character of an individual's behaviour: · intention or purpose of presence; · family and business/employment ties; · maintenance and location of assets; and · Social and living arrangements. You migrated with your family from an overseas country to Australia a number of years ago. You and your spouse purchased a home in Australia in Mid 2009. Upon your arrival you intended to live in Australia and raise your children. Your children commenced their schooling and you began an association with a church group. Your spouse commenced work. Your spouse went back overseas to continue working. You made trips between Australia and the overseas country. The main reason for these trips was to spend time with your spouse. You returned to your home in Australia each time you came back here. Australia was the only place you had a permanent place of abode. You returned to Australia on a regular basis until the purchase of a home overseas and you then returned to overseas with an intention not to live in Australia again and to only visit for holidays. You were a resident of Australia for taxation purposes from your arrival in Australia until your departure as you were residing in Australia according to ordinary concepts. As you were a resident of Australia for taxation purposes under the resides test it is not necessary to look at the domicile, 183 day and superannuation tests. Your residency status: You were a resident of Australia for taxation purposes for the period you were in Australia. You are required to declare all income both in and out of Australia in your Australian tax return.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.