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

Ruling: Question and answer | Were you a resident of Australia for taxation purposes for the period you were overseas? | No. | Is the income you earned overseas assessable in Australia? | No.

Relevant facts and circumstances: You were born overseas. You are a citizen of Australia. You left to work and live overseas a number of years ago. You had a work visa to work overseas. You went overseas to live and work. You had long term plans to live and work overseas. The work you were involved in allowed for long visa renewals. You had a work contract which could be extended. Due to a natural disaster overseas you returned earlier than planned. You lived in rented accommodation overseas. Your family accompanied you overseas. You had no assets overseas and only held one bank account. You had a home in Australia which was rented out while you were overseas and an investment fund along with a bank account. You had no social or sporting connections with the overseas country. You had no social or sporting connections with Australia. Neither you nor your spouse has ever been a Commonwealth Government employee.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). | Income tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1997 Subsection 995-1(1).

Reasons for decision: Summary: To understand your tax situation, you must first work out whether you are an Australian resident for tax purposes. Australian residents are generally taxed on their worldwide income and non-residents are generally taxed only on their Australian-sourced income. The definition of 'resident' within tax law 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 You do not meet any of the above tests and are not considered a resident of Australia for tax purposes from when you left Australia. You left to work overseas with the long term plan and intention to live and work there for a number of years. Your family accompanied you overseas. You rented out your home in Australia for the duration of your stay overseas and you rented accommodation overseas. The only reason you returned to Australia was due to natural disaster. The factsheet Residency - what you need to know provides details of the above residency tests and may be obtained from our website www.ato.gov.au. As you were not a resident of Australia for tax purposes while you were overseas, your assessable income in Australia for that period only includes income sourced in Australia. The salary you earned overseas is therefore not assessable 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.