Private ruling: Residency
Published: April 2013
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2009

Ruling: Questions and answers | Are you a resident of Australia for taxation purposes? | 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 are an Australian and Country A citizen You were born in Country A. You went to Country A with your spouse on a cultural research journey relating to background research on a book you are writing. You were away for approximately X years. You intend to visit Country A again to complete your research for your book. Your intention was to return to Australia at the end of these research trips permanently. You lived with relatives while in Country A You kept your Australian credit cards and bank accounts while you were away. You have never worked as a Commonwealth Public Servant in Australia.

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

Reasons for decision: Summary: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose 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. These tests are: 1. .The resides test 2. The domicile test 3. The 183 day test 4. The superannuation test The first two tests are examined in detail in Taxation Ruling IT 2650. 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 an Australian resident for tax purposes if they satisfy the conditions of one of the three other tests. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd 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'. 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. You meet the resides test as you have lived in Australia for some time. The purpose of your trips to Country A are only short term research journeys for the writing of your book and you intend to return here to live permanently. | Detailed Reasoning - The domicile test: If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country. 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. You have not demonstrated your intention to change your domicile to another country, as you did not intend to stay in Country A once your research was complete. At the time of you leaving to go to Country A you owned a house in Australia. The property was sold while you were away. You lived with relatives while in Country A. It was your intention to return to reside in Australia after completing your research. You live with members of your family when in Australia and intend to buy a new house when finances allow. The Commissioner is not satisfied that you have established a permanent place of abode outside Australia. Therefore, you are a resident under the domicile test.