Private ruling: Residency for tax purposes
Date of advice: 23 November 2018
Published: February 2019
Ruling period: Period ending 30 June 20XX | Period ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you and your spouse residents of Australia for taxation purposes? | A1: Yes

Relevant facts and circumstances: You and your spouse are citizens of country Y. You and your spouse have divided your time between Australia and country Y for a number of years. You and your spouse own a family home in Australia. You and your spouse own a family home in country Y. You and your spouse have a motor vehicle in Australia. You and your spouse have family ties in country Y. You and your spouse have business interests in country Y. You and your spouse are members of a private health insurance company in Australia. You were diagnosed with terminal cancer in 20XX in Australia. You retired from your business in country Y as a result of the illness Your medical care and specialists are in Australia You and your spouse will extend your stay in Australia on a more permanent basis to facilitate your care. You entered Australia on a visa as a temporary resident.

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

Reasons for decision: Summary: Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for taxation 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. The first two tests are examined in detail in Taxation Ruling IT 2650 Income tax: residency – permanent place of abode outside Australia. The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes. 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 will meet the resides test and therefore you both will be considered a resident of Australia for taxation purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936. However, where an Australian resident is also a temporary resident their foreign sourced income may not need to be included in their assessable income.