Private ruling: Are you an Australian for taxation purposes
Published: June 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2011

Ruling: Questions and answers: | Are you a resident of Australia for taxation purposes? | No.

Relevant facts and circumstances: You are a citizen of foreign country X. You carry a passport of that country. You are married to Australian citizen. You were living in Australia. Your spouse got a teaching contract in foreign country Y. Your spouse left Australia. You followed a short time later. You have not returned to Australia since this date. Your spouse has a multiple year visa for foreign country Y. Your spouse has an employment contract in foreign country Y. Your spouse has the right to renew their contract. You have a dependant visa attached to your spouse's visa, which is for the same period. Your original intention was to remain in foreign country Y for a fixed period, with your spouse teaching. You left Australia with the intentions of returning someday, but not for a number of years. Your plans with foreign country Y have changed as the role and the location of teaching job was not what and where your spouse was originally hoping for. It is now your intention to head off on backpacking/volunteering travel around developing countries when your spouse's employment contract comes to an end. You expect this period of travel will be a few years. After this period, you plan to return to foreign country Y, but will look for more specific roles that are better suited to your skills sets or professions and in locations that are better suited to you. You have established a relationship with an organisation in foreign country Y that is working on the recovery work in an area affected by a natural disaster. You will be continuing your support of this group while you are travelling and when you return to foreign country Y. You are a permanent member of the group, and do volunteer work for them in the recovery efforts, as well as completing the management and financial reporting for the group (unpaid work). In foreign country Y you have been provided a rental property to live in by a local government body. You have a bank account in foreign country Y. You both have mobile phone numbers in foreign country Y. You shipped many personal effects from Australia to foreign country Y when you moved there. You were living in your personal residence in Australia, prior to moving to foreign country Y. You own this home. This property is now being rented out. You also have an investment property in Australia. This is being rented out. You have bank accounts in Australia. You sold your car and other personal items before you left Australia. You cancelled your Australian mobile phone contracts. You have not been in Australia for more than 183 days in the income year You severed your social and sporting connections with Australia when you left Australia. You and your spouse have never worked for the Commonwealth of Australia Government. You are over 16 years of age. Relevant legislation provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) Income Tax Assessment Act 1936 Subsection 6(1)


Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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. These tests are: · the resides test · the domicile test · the 183 day test · 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 primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for tax purposes if they satisfy the conditions of one of the other three tests. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. Taxation Ruling IT 2650 provides guidelines for determining whether individuals who leave Australia temporarily to live overseas, for example, on temporary overseas work assignments or on overseas study leave, cease to be Australian residents for income tax purposes during their overseas stay. The principles and guidelines adopted in IT 2650 can also be used for individuals who intend to reside overseas indefinitely. Paragraph 19 of IT 2650 states: The first question to be asked in considering the residency status of a person temporarily leaving Australia is whether he or she can be considered to reside in Australia. If the test of residence according to ordinary concepts is satisfied, there is no need to go any further. The person is a resident of Australia for income tax purposes. In your case, it cannot be said that you reside in Australia according to ordinary concepts. You have lived in foreign country Y with your spouse since departing Australia and will continue to do so until your spouse's employment contract expires. Then you will travel for a few years with them around developing countries. Accordingly, it is considered that you are/will be residing in overseas countries and, therefore, are not a resident of Australia under the resides test. | Detailed Reasoning - The domicile test: If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. In order to show that an individual's domicile of choice has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country. In your case, as you are still a citizen of foreign country X while living overseas, your domicile is foreign country X and remains unchanged. As you do not have an Australian domicile you are not a resident under the domicile test during this period. | Detailed Reasoning - The 183-day test: Under the 183 day test you are considered a resident of Australia if you are present in Australia for a total period of more than half of the year of income, i.e. 183 days, unless the Commissioner is satisfied that your usual place of abode is outside Australia and you do not intend to take up residence in Australia. You have not been present in Australia for a total period of more than half of the year of income. Therefore you are not a resident of Australia under the 183-day test. | Detailed Reasoning - The superannuation test: An individual is considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee. You have stated that neither you nor your spouse has ever worked for the Commonwealth of Australia Government and so are not able to contribute to any of its superannuation schemes. Further, you are more than 16 years of age. Therefore, you are not a resident of Australia under the superannuation test. | Detailed Reasoning - Conclusion: As you are not a resident of Australia under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997, you are not considered to be an Australian resident for taxation purposes.

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. | Reasons for decision: These reasons for decision accompany the Notice of a private ruling.