Private ruling: Residency and leaving Australia
Published: December 2014
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Questions and answers | Are you a resident of Australia for taxation purposes from the date you left Australia? | No


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

Reasons for decision: Summary: An Australian resident for taxation purposes is defined in subsection 995-1(1) of the ITAA 1997 as 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' are defined in subsection 6(1) of the ITAA 1936. The definition gives us a series of tests which assist in determining whether a person is a resident of Australia. These tests are: 1. residence according to ordinary concepts; 2. the domicile/permanent place of abode test; 3. the 183 day/usual place of abode test; or 4. the Commonwealth superannuation fund 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 you do not reside in Australia according to ordinary concepts, you may still be a resident of Australia for tax purposes if you meet the conditions of any one of the other three tests. We refer to Taxation Ruling IT 2650 Income tax: residency - permanent place of abode outside Australia which provides guidelines for determining whether individuals who leave Australia to live overseas cease to be Australian residents for income tax purposes during their overseas stay. | Detailed Reasoning - 1. Residency according to ordinary concepts 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 question of whether an individual 'resides' in a particular country is a question of fact and degree and not of law. In deciding this question, the courts have consistently referred to and taken into account the following factors as being relevant: (i) Physical presence in Australia (ii) Nationality (iii) History of residence and movements (iv) Habits and "mode of life" (v) Frequency, regularity and duration of visits to Australia (vi) Purpose of visits to or absences from Australia (vii) Family and business ties to different countries (viii) Maintenance of Place of abode. The weight given to each factor varies with individual circumstances and no single factor is necessarily decisive. In your case, you will not be residing in Australia for the purposes of the resides test for the following reasons: • You are living and intend to live in Country A permanently. • You consider yourself a resident of Country A for income tax purposes. • Your employment contract with is permanent and is for an indefinite period. • You are a citizen of Country A. • You live with your relatives in Country A. • The only asset you have in Australia is a bank account . | Detailed Reasoning - Other residency tests: Even where a taxpayer is not considered to 'reside' in Australia in accordance with the ordinary meaning of the term, the taxpayer will still be considered to be a resident of Australia for domestic taxation purposes where they meet one of the other three residency tests, being the domicile and permanent place of abode test, the 183 day test and superannuation fund test. | Detailed Reasoning - 2. The domicile test: Under this test, a person whose domicile is in Australia will be considered a resident of Australia for taxation purposes, unless the Commissioner is satisfied the person's permanent place of abode is outside 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 acquire a new domicile by choice, a person must have an intention to make their home indefinitely in a country outside their domicile of origin. Sufficient proof of such an intention is considered to exist in cases where a person is granted permanent residency, or becomes a citizen of a country outside of their domicile of origin. Your country of origin is Country A. You have become both a citizen of Australia and Country A, however you have stated that you will be permanently living in Country A and do not intend returning to Australia. | Detailed Reasoning - 3. The 183-day test: Under this test, a person who is in Australia for 183 days (not necessarily consecutively) during an income year may be considered a resident of Australia for taxation purposes, unless the Commissioner is satisfied the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You were in Australia for less than 183 days in the income year ended 30 June 2015. | Detailed Reasoning - 4.Superannuation test: Based on the facts you have provided this test is not relevant in your situation as it only applies to persons eligible to contribute to the superannuation funds for Australian government officers, their spouses, or their children under the age of 16 years. | Detailed Reasoning - Conclusion - your residency status: Based on the facts you have provided, you will not be a resident of Australia for income tax purposes between the period 1 July 2014 to 30 June 2015.

Relevant facts: You are a citizen of Australia and Country A. | You left Australia permanently in 2014. | You intend to reside in Country A permanently. | Your purpose for moving to Country A is for full time permanent employment. | You have no plan to return to Australia. | You have full time employment with in Country A on a full time unlimited timeframe. | You have not returned to Australia since moving to Country A. | You have a permanent place to live in Country A as you are living with relatives. | You have bank accounts in Country A. | You were living with relatives in Australia. You do not have a permanent place of abode in Australia. | You have a bank account in Australia. You have notified the bank that you are a non resident. | You are paying tax on your income in Country A. | You have no sporting or social connections in Australia. | You are not nor were you a Commonwealth Government of Australia employee.