Private ruling: Residency for tax purposes
Published: November 2012
Ruling period: Year ending 30 June 2013. | Year ending 30 June 2014. | Year ending 30 June 2015. | Year ending 30 June 2016.
Date scheme commenced: 1 July 2012.

Ruling: Question and answer | Are you a resident of Australia for tax purposes? | Yes.

Relevant facts and circumstances: You are a citizen of Australia. You work in Country X. You maintain a residence in Country X. You own a home in Australia. Your spouse and children live in your home in Australia. You return to live in the family home in Australia for one week each month. You are not legally separated from your spouse.

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

Reasons for decision: Summary: Generally 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. The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions which provides four tests to ascertain the residency status. The resides test Whether the individual resides in Australia according to the ordinary meaning of the word resides. Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia emphasises the intended and actual length of the individual's stay in an overseas country, any intention to return to Australia or travel elsewhere, the establishment or abandonment of any residence, and the durability of association that the individual maintains with a particular place in Australia as the main factors to be considered when determining the residency status of individuals leaving Australia. In your case, you are working in Country X. When you are not working you leave Country X to return to Australia. You return to Australia for one week each month. When you are in Australia, you live in a house that you own. Your spouse and children reside permanently in this house. Although you have economic ties to Country X by way of your employment, your ties to Australia are stronger, as you maintain a home in Australia, you return to Australia when you are not working, you have assets in Australia, and your spouse and children are in Australia. Based on these facts, you are residing in Australia according to the ordinary meaning of the word. Therefore, you meet the 'resides test' and are a resident of Australia for tax purposes. As you are a resident under the resides test, it is not necessary to consider the other three tests.

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