Private ruling: Residency for tax purposes
Published: June 2012
Ruling period: Year ended 30 June 2011 | Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you a resident of Australia for tax purposes? | A1: Yes.

Relevant facts and circumstances: You were born in Australia. You are an Australian citizen. You are single. You have been working in Country X since July 2010. You are employed by a Country Y company. You intend to live and work overseas permanently. You returned to Australia when on holidays to visit relatives. Since starting work in Country X, you have returned to Australia three times. You have the following assets in Australia: · Bank account · Term deposit · Superannuation fund · Two investment properties · You have the following assets overseas: · Bank account in Country Z · Shares in your employer's company · Country Y pension fund You previously lived in a house you owned in Australia, which you sold when you went to work in Country X. You are not eligible to contribute to a Commonwealth government superannuation fund. You have no social or sporting connections to Australia. You have social connections in Country X. When working in Country X, you stay in accommodation provided to you by your employer. Due to the circumstances in Country X, it is safer for you to stay in the employer-provided accommodation than to live independently. For the purposes of determining whether you have a 'permanent place of abode' under the domicile test, you would like it to be considered that Country X's political climate would make it potentially unsafe for you to live independently. It is in your best interests to remain in the employer-provided accommodation with the provision of security from your employer. You are able to continue your ordinary activities while staying in the employer-provided accommodation.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision: Summary: Generally where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions and provides four tests to ascertain the residency status. Relevant to your situation is the domicile test, which is examined in detail in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia. In examining this test, IT 2650 provides a number of factors which assist in assessing a taxpayer's situation against the tests. A copy of this ruling is available from www.ato.gov.au. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia. Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence. Your domicile is Australia because you were born in Australia and you are an Australian citizen. As explained in IT 2650, individuals who "make do" in temporary accommodation with limited resources and facilities such as in barracks, singles' quarters, aboard ships, oil rigs, or mining towns, will be less likely to be considered to have established a permanent place of abode overseas. In your case the Commissioner is not satisfied that you have a permanent place of abode outside of Australia because: · While working in Country X, you stay in accommodation provided by your employer · You return to Australia when you are not working · You have maintained investment properties and bank accounts in Australia The fact that it may be unsafe for you to live independently in Country X is not relevant when determining whether you have established a permanent place of abode overseas. Therefore, you are a resident of Australia under this test. | Detailed Reasoning - Your residency status: As you meet the domicile test, you a resident of Australia for tax purposes. As you are a resident, your assessable income includes income gained from all sources, whether in or out of Australia.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.