Private ruling: Residency - leaving Australia
Date of advice: 29 June 2016
Published: August 2016
Ruling period: 1 July 20xx to 30 June 20yy | 1 July 20yy to 30 June 20zz
Date scheme commenced: 15 May 20yy

Ruling: Q1: Are you a resident of Australia for tax purposes for the period 1 July 20xx until you depart Australia? | A1: Yes. | 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 Country A. You are a citizen of Country A. You entered Australia in May 20vv with the intention of residing permanently. You have been granted permanent residency for Australia and you will renew this visa to maintain your residency status. You departed Australia in May 20yy to commence employment at a permanent ongoing job with a company in Country B. You have an employment visa for Country B and can stay there permanently. You have rented an apartment in Country B and have a one year extendable lease. You are treated as a resident and are paying taxes in Country B. Your intention is to work in Country B as long as possible. You may return to Australia to receive your graduation certificate or to renew your permanent residency visa if required. You have informed the Australian Electoral Commission you have departed Australia. You have closed your Australian private health insurance. You have no family ties in Australia. In Australia you shared furnished, rental accommodation with a friend. You have taken your personal effects with you to Country B. You have no taxable Australian property. You have maintained bank accounts in Australia. You have opened bank accounts in Country B. There is no working position or job being held for you in Australia. You have not maintained any professional, social or sporting connections in Australia. The Commonwealth superannuation test does not apply to you.

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 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 on in May 20yy. You ceased being an Australian resident for tax purposes from June 20yy. You are entitled to a tax free threshold for the period you were a resident of Australia.