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

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


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

Reasons for decision: Summary: An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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. These tests are: § the resides test, § the domicile test, § the 183 day test, and § 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. Where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident if they meet the conditions of one of the other 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'. As you live in hotels and motel accommodation or mobile camps at your place of employment, you are living in temporary accommodation and do not have an actual place to live in Australia, you are not residing in Australia. As you do not meet the resides test, we will need to consider whether you meet any of the other three tests of residency. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia. Domicile Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence. Taxation Ruling IT 2650 Residency - permanent place of abode outside Australia provides that the common law test of domicile of choice has now been restated in section 10 of the Domicile Act which states that the intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his home indefinitely in that country. In determining a person's domicile for the purposes of the definition of resident in subsection 6(1) of the ITAA 1997, it is necessary to consider the person's intention as to the country in which he or she is to make his or her home indefinitely. You have stated that you have no intention of returning to Australia to live as you have established a home in Country X where you live with your spouse. You have not lived in Australia for many years. It is considered that you have established your domicile in Country X. Therefore, under the domicile test you will be a non resident of Australia for tax purposes. | Detailed Reasoning - The 183 day test: There may be situations where an individual does not reside in Australia during a particular year but is present in Australia for more than one-half of the income year (perhaps intermittently) and intends to take up residence in Australia. Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. As you will be physically present in Australia for more than one-half of the income year, as discussed above the Commissioner is satisfied that you do have a usual place of abode outside Australia and you do not intend to take up residence in Australia at this time. Therefore, you are not a resident of Australia under this test. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident of Australia if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) of the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS. As you do not meet the above conditions you are not a resident under this test. | Detailed Reasoning - Conclusion: As you do not meet any of the above tests, you are not a resident of Australia for tax purposes. As you are not a resident of Australia, according to section 6-5 of the ITAA 1997, your assessable income only includes income gained from sources in Australia.

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 an Australian citizen but have lived overseas for the past number of years. You have been a non-resident of Australia for taxation purposes for many years. | You reside in Country X with your spouse. All of your personal belongings are in Country X. | Your spouse was granted permanent Australian residency several years ago but is a non resident of Australia for tax purposes. | Your children were born in Country X but they are now living and working in Australia. | You purchased an investment property in Australia a number of years ago. If your children remain in Australia they may reside in the property at some stage in the future. | You have no other assets in Australia and do not have any sporting or social ties with Australia. | You have been employed overseas for a number of years working on a rotational roster and return home to Country X when you are not at work. | You make occasional visits to Australia to visit family. | You have an employment contract to work in Australia. You work on a fly in/fly out arrangement. | You have no fixed place of employment and you work in mobile camps. | Your employment contract which requires you to work in remote areas of Australia will require you to spend more than one half of the 2012 tax year in Australia. | While working in Australia you live in hotels, motels or mobile camps. | You are not a member of the superannuation scheme established by deed under the Superannuation Act 1990.