Private ruling: Residency
Date of advice: 1 June 2016
Published: July 2016
Ruling period: 1 July 2014 to 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you a non-resident of Australia for tax purposes for the period 1 July 2014 to 30 June 2015 | A1: No | Q2: Are you a non-resident of Australia for tax purposes from the date you departed Australia? | A2: Yes

Relevant facts and circumstances: Your country of origin is Australia. You are an Australian citizen and do not hold citizenship or have permanent residency with any other country. You are married with adult children. You left Australia with your spouse to commence employment in a foreign country during the financial year ended 30 June 20XX with the intention to remain overseas indefinitely. You have been issued at foreign country visa which was arranged through your employer. These visas are issued for periods of up to two years at a time with renewal required for each subsequent period. Your main residence has been rented to one of your adult children with a formal rental agreement in place and charged at the commercial rate of rent. You have deregistered from the Electoral Roll. You have cancelled your Australian private health insurance. You are no longer a member of any clubs or organisations in Australia. Ownership of your vehicles has been transferred to one of your adult children with the department of transport. Ownership of your household and personal effects have been sold or given away. You and your spouse hold two other Australian rental properties. You have not returned to Australia since you left. You have secured rental accommodation in the foreign country and have lived in the same property with a long term lease agreement renewed every 12 months. You have established service contracts with the foreign country companies and authorities, including mobile phone, electricity, internet and gas. You have purchased a car and have obtained a drivers licence in the foreign country. You and your spouse have established bank accounts and credit cards in the foreign country. You and your spouse have joined several social clubs in the foreign country. The Commonwealth superannuation test does not apply to you or your spouse.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(1) Further issues for you to consider | Anti-avoidance rules

Reasons for decision: Summary: Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes 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', 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. The tests are: • the resides test, • the domicile test, • the 183 day test, and • the superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. Based on the facts you have provided, we can conclude that you do not satisfy any of the tests of residency. Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from the date you departed Australia. You were a resident of Australia for tax purposes prior to your departure from Australia. You ceased being an Australian resident for tax purposes from the date you departed. You are entitled to a tax free threshold for the period you were a resident of Australia.