Private ruling: Residency
Date of advice: 9 January 2018
Published: June 2018
Ruling period: Year ended XX June 20XX | Year ended XX June 20XX | Year ended XX June 20XX | Year ended XX June20XX
Date scheme commenced: XX July 20XX

Ruling: Q1: Were you a resident of Country A for taxation purposes? | A1: No

Relevant facts and circumstances: You were born in the Country X. You are a citizen of Country A and Country X. You departed Country A for Country X in 20XX to look after your older parent. Your intention was to return to Country A. Your parent passed away in 20XX. You stayed in Country X to finalise the estate. You returned to Country A permanently in 20XX. You did not return to Country A for any period after departing for Country X. You stayed in your parent’s property while in Country X. You have a bank account and a motor vehicle in Country X. You have a Country X driver’s licence. You did not own properties in Country A, your living arrangements in Country A prior to the departure were: paying board and accommodation supplied by your employer. Your personal effects were put into storage while you were away. You maintained bank accounts; your superannuation and shares in Country A. You advised the Country A Electoral Commission that you were departing Country A. You suspended your private health insurance in Country A. You are not an eligible employee in the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS).

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

Reasons for decision: Summary: Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Country A resident for taxation purposes as a person who is a resident of Country A for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936). The terms ‘resident’ and ‘resident of Country A, 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 Country A 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 Country A. The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Country A 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 Country A for taxation purposes. Based on the facts you have provided, we can conclude that you did not satisfy any of the tests of residency. Accordingly you were not a resident of Country A for taxation purposes under section 995-1 of the ITAA 1997 and subsection 6(1) of the ITAA 1936.