Private ruling: Residence for tax purposes
Date of advice: 2 August 2017
Published: November 2017
Ruling period: Year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Question and answer | Are you a resident of Australia for taxation purposes from your departure date? | No.

Relevant facts and circumstances: You are a citizen of Australia. You intend on moving to Country Y in the 2018 income year for work purposes. You are the CEO of a company. A decision has been made to move the headquarters of the company to Country Y. Your spouse will accompany you to Country Y. You intend on leaving Australia indefinitely. You have commenced the process for obtaining permanent residency in Country Y. You will return to Australia for business and these trips will not exceed 183 days in any income year. You will stay in hotels or with your family on these trips. You have adult children in Australia. You will sell your home in Australia. You will take furniture and personal items to Country Y with you. You will cease your car lease in Australia. You will transfer funds to Country Y. You will consolidate your bank accounts and credit cards in Australia. You will suspend your private health cover in Australia. You intend on maintaining your directorship in a private company. You will maintain your self-managed super fund and will not make any personal contributions to the fund. You will initially lease a property in Country Y before purchasing a property once you have permanent residency. Neither you nor your spouse are eligible to contribute to the relevant commonwealth super funds.

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

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 will 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.