Private ruling: Residency
Published: May 2012
Ruling period: Year ended 30 June 2008 | Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ending 30 June 2012
Date scheme commenced: 1 July 2007

Ruling: Q1: Were you a resident of Australia for tax purposes during Period One? | A1: No. | Q2: Will you be a resident of Australia for tax purposes Period Two? | A2: No.

Relevant facts and circumstances: You resided in Australia prior to moving to Country A during the 2007-08 financial year. When you moved to Country A you intended the move to be a permanent one as you had accepted an employment position with employer A. You anticipated working with that company in Country A for over three years. When you moved to Country A during the 2007-08 financial year you: · resigned from your existing employment in Australia · commenced making arrangements to move the whole family to Country A. However, personal issues prevented your family moving · leased a three bedroom residence on a long term lease for the purpose of providing accommodation for yourself and your family. This lease was renewed for a further period · established a membership of local clubs · acquired assets · removed yourself from the Australian electoral roll and the family Medicare card · did not remain a member of Australian clubs or renew your professional qualifications and · did not maintain Australian bank accounts other than as a joint signatory on an account held with your spouse. During the 2009-10 financial year you ceased your employment with Employer A. During the period of your employment with Employer A (Period One) you spent time in Australia visiting your family and time in Europe. After your employment ceased you travelled for some time before returning to Australia. You returned to Country A during the 2011-12 financial year commence a permanent employment position with Employer B and have remained there since. Since returning to Country A you: · leased a new three bedroom property · obtained membership to clubs for yourself and your family · established health insurance for yourself and your family · renewed your professional qualifications, and · maintained your bank accounts. You have spent time in Australia visiting your family for annual leave periods. The period of your employment with Employer B is Period Two. Your family has joined you in Country A during school holidays. Neither you nor your spouse are members of a Commonwealth superannuation fund.

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

Reasons for decision: Summary: You are considered not to have been a resident of Australia for tax purposes during Period One as you established a new domicile in Country A during this period. You will not be considered to be a resident of Australia for tax purposes during Period Two as you have established a new domicile in Country A during this period. | Detailed Reasoning - Detailed reasoning: An Australian resident is defined in section 995-1 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'. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for tax purposes if they satisfy the conditions of one of the other three tests. After examining your particular circumstances it is considered that during Period one and Period Two: · you did not reside in Australia according to ordinary concepts as you were living in Country A · you had established a new domicile and permanent place of abode in Country A · you did not meet the 183 day test as you were in Australia for less than this number of days in each financial year during the periods, and · you do not meet the superannuation test as neither you nor your spouse are members of a Commonwealth superannuation fund. Accordingly, you are not considered to be an Australian resident for tax purposes during Period One or Period Two.

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