Private ruling: INTL - residency
Published: October 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you an Australia resident for income tax purposes? | A1: No.

Relevant facts and circumstances: You moved to Australia from Country A in 20XX. You left Australia in Month 20XX to work in Country B. Your employment started in Month 20XX and is based on a three year contract. Your family came with you to the Country B. You and your family are living in a rental property which you signed a year lease agreement with. You intend to gain overseas work experience and then return to Australia. When you lived in Australia you rented a property. Your savings are in an Australian bank.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). Reasons for decision | The term 'resident of Australia' is defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) to mean a person who resides in Australia or satisfies one of three statutory residence tests. The statutory residence test applicable to the rulee is contained in subparagraph (a)(i) of subsection 6(1) of ITAA 1936. Under this test, a person whose domicile is in Australia is deemed to be a resident of Australia unless the Commissioner is satisfied that the person's permanent place of abode is outside of Australia. As explained at paragraph 8 of Taxation Ruling IT 2650, a person acquires at birth a domicile of origin, being the country of his or her father's permanent home. A person retains the domicile of origin unless and until he or she acquires a domicile of choice in another country. | Your domicile of origin is Country A and you have acquired a domicile of choice in Australia. Therefore, in accordance with the statutory test referred to above, you will be deemed to be an Australian resident unless the Commissioner is satisfied that you had a permanent place of abode outside of Australia. | As explained at paragraph 22 and 26 of IT 2650 the term 'permanent' does not have the meaning of everlasting or forever but is used in the sense of being contrasted with temporary or transitory. If an individual with a usual place of abode in Australia has no fixed or habitual place of abode overseas but moves from one country to another or moves constantly within the same country (for example, from town to town or even from suburb to suburb) any association with a particular place overseas would be purely temporary or transitory and he or she would not be considered to have adopted a permanent place of abode outside of Australia. | In your case, you and your family have moved to Country B to allow you to gain work experience. You employment is based on a three year offer and you are renting out a property on a long term basis. You do not have a job or home in Australia, the only assets you have left behind is money in an Australia bank account. The Commissioner is satisfied that you have a permanent place abode outside of Australia and are therefore not an Australia resident for tax purposes.