Private ruling: Residency
Date of advice: 12 January 2018
Published: May 2018
Ruling period: Income year ended 30 June 2017.
Date scheme commenced: DDMMYY

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

Relevant facts and circumstances: General You are a citizen of Australia. You are not a citizen of any country other than Australia. You were born in a foreign country and immigrated to Australia with your parents when you were X years old. You lived in Australia until early 2017. You left Australia to live and work in a foreign country. You are currently living with your partner who is a citizen of the foreign country. Your partner has been in Australia only on a short-term holiday. For the foreseeable future, you do not intend to coming back to Australia or staying in Australia for more than 183 days in any income year. You will spend this time holidaying and visiting your parents. You are currently holding a multi-entry visa in the foreign country which is valid for X years. It does not allow you to remain in the foreign country permanently. However, it should be noted that the foreign country does not have any permanent residency visa for any foreign passport holders in general except in some extremely limited circumstances. The multi-entry visa could be easily renewed when expired. Your visa was not supplied by an employer. You have not been granted permanent residency by any other country. Apart from the foreign country, you did not have any destination overseas. You are not a member of the Public Service Superannuation Scheme or the Commonwealth Superannuation Scheme. You formed your intention to make your home indefinitely outside of Australia on the date of departure. You have not returned to Australia for any period after first leaving. You will inform the Australian Electoral Commission and Medicare that you have departed Australia. You advised your private health insurance provider to have your policy cancelled. When completing outgoing passenger card you stated as your residency status is temporary visitor. The address you stated is your parents’ residential address. Prior to your departure, you did not lodge an Australian income tax return as your income was less than lodgement threshold for the income year ended 30 June 2017. After your departure, you will not lodge a tax return as you do not have any taxable income sourced from Australia. Accommodation While in Australia, you lived with your parents in their home. You have purchased a property in the foreign country. The purchase price of the property was largely funded by a borrowing from your family members and partially funded by your partner. This home is to be used as your main residence. Assets You do not have any property in Australia. You have about $X in your Australian saving bank account. These are mostly your savings from your previous employments and income in Australia. You have updated your postal address with the bank to your the foreign country address. You have a car in Australia. From the date of your departure, you settled in the foreign country and since then you have: ● Purchased a dwelling to live in. ● Obtained a foreign country driver’s license. ● Started a sole trader business in the foreign country. ● Obtained a foreign country bank account and bank card; all your living expenses and business expenses are paid through this bank account now. You will not make any investments in Australia while you are overseas. You do not have household or personal effects in Australia. You have not yet any foreign income tax returns while living overseas. Family and social connections You do not have any other family members in Australia except for your parents. You have other family members in the foreign country, including siblings. You have social contacts in the foreign country including friends and business associates. You do not maintain any professional, social or sporting connections with Australia. You do not maintain any professional or occupational memberships in Australia. You do not have a position or job being held for you in Australia.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 995-1(1) | Income Tax Assessment Act 1936 Section 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 (and permanent place of abode) 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, you did not satisfy any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 from the date of your departure from Australia. 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 of your departure from Australia.