Private ruling: Residency
Date of advice: 17 October 2017
Published: March 2018
Ruling period: Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ended 30 June 2021
Date scheme commenced: 1 November 2017

Ruling: Q1: Are you a resident of Australia for income tax purposes from your date of departure? | A1: No.

Relevant facts and circumstances: You were born in Australia. You are a permanent resident of Australia. You intend to move to Country X for a job at your employer’s request. You have an initial X year contract however you think it is likely it will be extended. You will enter Country X on a X month visa. This will then convert to a Work Permit and Temporary Residence Card (TRC). This will allow you to stay for the duration of your contract. Your spouse will be issued a TRC on the basis of being your spouse. Your employer will provide you rented accommodation in Country X. You will have sole use of this accommodation. Your spouse and your children will join you in this move. You will rent out your Australian residence while you are in Country X. You will retain your Australian mortgage and offset bank accounts while overseas. You intend to return to Australia infrequently for holidays and special occasions. You do not intend to reside overseas permanently. Your intention is to return to Australia at end of the initial contact of X years, or the extended contract period of approximately X years. You and your spouse are not a member of the PSS or CSS.

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

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (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. Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax 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. 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 are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from your date of departure from Australia.

The advice in the Register has been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict ATO policy or decisions.