Private ruling: Residency
Published: June 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you a resident of Australia for tax purposes? No.


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

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) and section 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). 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. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established. | 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'. We consider you were residing in country A as evidenced by: · you living in rental accommodation · you being in continuous employment under a contract · your intention to live in country A permanently, and · you taking steps to obtain a residency visa for your spouse in country A. Therefore, as you were residing in country A, you were not considered to be residing in Australia. | Detailed Reasoning - The domicile test: If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. A person's domicile of origin will not usually change, but can in some circumstances. For example, a person can acquire a domicile in another country by choice. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country (such as by applying for citizenship or permanent residency in that country). As you were born in Australia, are an Australian citizen and did not apply for permanent residency or citizenship in country A, we consider your Australian domicile remains unchanged. The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives. A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere. In your case, you moved to country A for the purpose of working and living there. You lived in rental accommodation, and took steps to obtain a residence visa for your spouse, so the Commissioner is satisfied that you had a permanent place of abode outside of Australia there and are not a resident under this test. | Detailed Reasoning - The 183-day test: Under the 183 day test you are considered a resident of Australia if you are present in Australia for a total period of more than half of the year of income, that is 183 days, unless the Commissioner is satisfied that your usual place of abode is outside Australia and you do not intend to take up residence in Australia. As you were present in Australia for less than 183 days in the financial year, you are not a resident for tax purposes under this test. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident 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. To be eligible to contribute you must be or have been a Commonwealth Government employee You will not be treated as a resident under this test as you and your spouse have not worked for the Commonwealth Government of Australia and so cannot be members of the CSS or PSS. Further you are over 16 years old. | Detailed Reasoning - Conclusion: As you are not a resident of Australia under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997, you are not an Australian resident for tax purposes.

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. | Relevant facts: You are a citizen of Australia and Australia is your country of origin. | You departed Australia to live and work in country A. | You intended living in country A permanently and were granted a residence visa a few months after your arrival. | You rented an apartment while living in country A. | You were employed under a 12 month contract which was extended to 18 months. | Your spouse resigned from his/her job and travelled to country A. | Your spouse was only able to stay in country A for short periods of time (as he/she was not going to work in country A). | Your spouse returned to Australia to work as his/her application for residency was going to take several months. | Your spouse paid board to live places close to his/her employment. | Due to difficulties in relocating your spouse to country A you resigned from your position and sought work closer to Australia. | You returned to Australia and obtained employment in another country. | During your stay in country A in the financial year you returned to Australia for holidays. | You own a property in Australia which was your residence before you left. This property has been rented out since then. | Your assets in Australia include your property, a bank account and some shares. | You did not have any assets in country A except for a bank account. | You did not pay tax on your income in country A. | You do not have any social or sporting connections in Australia except for a club membership. | In country A you played sport on days off. | You and your spouse have never been Commonwealth Government of Australia employees. | You are over 16 years of age.