Private ruling: Residency
Date of advice: 4 July 2016
Published: August 2016
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20YY | Year ended 30 June 20ZZ
Date scheme commenced: 1 July 20XX

Ruling: Q1: Were you a resident of Australia for taxation purposes for the period from month 20XX to month 20YY? | A1: No

Relevant facts and circumstances: You were born in Australia. You are a citizen of Australia. You departed Australia in month 20XX to commence employment in Foreign Country A for an anticipated period of 30 months. You entered Foreign Country A on an Alien Registration Card (ARC), the ARC did not allow you to stay in Foreign Country A permanently and required annual renewal. Your employer assisted you in obtaining the ARC. Your spouse and youngest child accompanied you to Foreign Country A. Your youngest child returned to Australia as your child did not like the lifestyle in Foreign Country A. You and your spouse took personal effects and electronic devices to Foreign Country A. You were provided with long term leased accommodation in Foreign Country A by your employer. The accommodation was for you and your spouse personal use only. When returned to Australia for holidays, the accommodation was left vacant. You and your spouse left personal belongings in that property. You moved all your furniture and other personal belongings out of your Australian main residence and stored them into a storage facility in Australia. Your two adult children moved all their personal belongings and furniture into your Australian main residence and resided in this property for the duration of your assignment. You did not charge your children rent; your children covered the majority of the utility expenses. When you and your spouse returned to Australia for holidays, you stayed in the guest bedroom of your main residence. You completed your immigration card as 'Permanently Departing Australia' when you initially departed Australia on assignment and completed your immigration card as 'Visiting Family and Friends/Holidays' on your subsequent visits. Your mail was collected by your children and forwarded onto you in Foreign Country A. You maintain Australian bank accounts for the ownership of your Australian main residence, personal savings and receipt of employment income. You opened a Foreign Country A bank account to receive the Cost of Living Allowance. You own two cars which were maintained at your Australian main residence for the duration of your assignment to Foreign Country A, so your children could use the cars when required. Your intention was to work in Foreign Country A for at least the duration of your employment contract of 30months. You repatriated back to Australia in month 20YY because your work visa lapsed. Resident tax returns were lodged in Foreign Country A by your employer and taxes payable in Foreign Country A were settled by your employer. You lodged 20XX Australian income tax return as a Resident of Australia upon advice from your previous tax agent. You did not inform the Australian Electoral Commission or Medicare that you were departing Australia. You did not advise your private health insurance provider to suspend or cancel your cover as your youngest child still has access to this policy. You did not advise your Australian financial institutions that you became non-resident of Australia for tax purposes. You and your spouse are not a Commonwealth government of Australia employee for superannuation purpose.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) | Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1997 Section 6-5

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, we can conclude that you will not satisfy any of the tests of residency. Accordingly you were not a resident of Australia for taxation purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 for the period from month 20XX to month 20YY. | Detailed Reasoning - Additional information: Section 6-5 of the ITAA 1997 provides that 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.