Private ruling: Residency
Date of advice: 8 July 2015
Published: July 2015
Ruling period: Year ended 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019
Date scheme commenced: 1 July 2014

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

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You were born in Australia. You are a citizen of Australia. You have been living in Country Y for a number of years. You are a resident of Country Y for taxation purposes. You live with your spouse and children in Country Y. You have a multiple entry visa which allows you to stay in Country Y for X days at a time. You are required to leave Country Y for at least 1 day at the expiry of your X day stay in Country Y. You go to either Australia or Country Z each time you are required to leave Country Y. You are not a citizen or permanent resident of Country Y. You do not have any property in Country Y. You have given your spouse money to buy properties in Country Y which are all in their name as you are not able to own property in Country Y. You do not work in Country Y. You receive a pension from Australia. You do not have any other assets in Australia. You do not intend on being in Australia for more than 183 days in any financial year. Your spouse and children will not accompany you to Australia when you are on holiday. You are not eligible to contribute to the relevant commonwealth super funds.

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. The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 . The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the: • resides test • domicile and permanent place of abode test • 183 day test and • Commonwealth superannuation fund test. The primary test for deciding the residency status of each individual is whether they reside in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established. | Detailed Reasoning - The resides (ordinary concepts) test: The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word ' resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test. Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides' test: (i) Physical presence in Australia (ii) Nationality (iii) History of residence and movements (iv) Habits and "mode of life" (v) Frequency, regularity and duration of visits to Australia (vi) Purpose of visits to or absences from Australia (vii) Family and business ties to different countries (viii) Maintenance of place of abode. These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling IT 2650 Income Tax: residency - permanent place of abode outside Australia and Taxation Ruling TR 98/ 17 Income tax: residency status of individuals entering Australia . It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances. You have been living in Country Y for a number of years. You live with your spouse and children in Country Y. You contribute financially to your spouse and children in Country Y. You have contributed financially for the purchase of properties in Country Y which are in your spouse's name due to you not being allowed to own property in Country Y. You will return to Australia for holidays but will not exceed 183 days in any financial year. You have a car in Australia which you store in Australia while you are in Country Y and you stay in when you are on holiday in Australia. Based on the facts above you are not residing in Australia according to ordinary concepts. You are not a resident under this test. | Detailed Reasoning - The domicile test: If a person's domicile is Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. In order to show that a new domicile of choice outside Australia has been adopted, the person must be able prove an intention to make his or her home indefinitely in another country. This could be by obtaining permanent residency or citizenship. The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives. A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere. Your domicile is Australia. The Commissioner is satisfied that you have a permanent place of abode outside Australia for the following reasons: • You live in Country Y with your spouse and children • You have a home with your spouse in Country Y • You only return to Australia for holidays You are not a resident under this test. | Detailed Reasoning - The 183-day test: Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You will not be in Australia for more than 183 days in a financial year. You are not a resident under this test. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident if that person is eligible to contribute to the PSS or the 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 are not eligible to contribute to the relevant Commonwealth super fund. You are not a resident under this test. | Detailed Reasoning - Your residency status: You are not a resident of Australia for taxation purposes.