Private ruling: Residency - Foreign Resident
Published: June 2012
Date scheme commenced: 1 July 2011.

Ruling: Q1: Will you be considered an Australian resident for income tax purposes? | A1: No. Income period: Year ended 30 June 2011. Year ending 30 June 2012. Year ending 30 June 2013. The scheme commenced on: 1 July 2011.


Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). Facts: | You are an Australian citizen. | You moved to Country A some time in the 2007-08 income year and commenced employment with an Australian Government agency some time later in that same income year. | You have been working there on contract and your current employment contract ceases some time in the 2013-14 income year. | You plan to continue to reside in Country A for the period of your employment contract, which is renewable for another two years after its cessation some time in the 2013-14 income year. | You have been renting a property in Country A which is again on a 12 month renewable lease. | You do not have any assets in Australia. You have only one bank account which is unused and has a small balance. | Since departing Australia, you only returned for two short periods for personal reasons. | You do not have a permanent place to live in Australia. Your previous address was at a property you were renting out for four years. | You are not and never have been a member of the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS) and you do not have a spouse.

Reasons for decision: Summary: The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia. These tests are: · the resides test. · the domicile test. · the 183 day test. · 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 meet the conditions of one of the other three tests. | Detailed Reasoning - 1. The resides test: The ordinary meaning of the word 'reside', according to the dictionary definition, 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 are now residing in Country A, you are not considered to be residing in Australia under this test. | Detailed Reasoning - 2. The domicile test: If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country. In your case, you are an Australian citizen, and there is no evidence of an intention to make your home indefinitely in Country A. Therefore, you are considered to have maintained your Australian domicile. However, your association with Country A is considered significant as you work and reside there. You've been working with an Australian Government agency and residing there since some time in the 2007-08 income year. Your current contract ceases some time in the 2013-14 income year and has an option of renewal for another two years after cessation. You rent a local property and plan to reside in Country A for the length of your employment. Based on these facts, it is therefore considered that you have established a permanent place of abode outside of Australia. | Detailed Reasoning - 3. The 183-day test: This test does not apply to you as it has been identified that your permanent place of abode outside of Australia. | Detailed Reasoning - 4. The superannuation test: An individual is still considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. You are not a contributing member of the PSS or the CSS, nor are you the spouse or child of such a person. Therefore, you will not be treated as a resident under this test. | Detailed Reasoning - Your residency status: As you are not deemed to be a resident of Australia under any tests of residency outlined in subsection 6(1) of the ITAA 1936, you are not considered to be a resident of Australia for income tax purposes from the date of your departure from 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.