Private ruling: Residency status
Published: April 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Question and Answer: | Were you a resident of Australia for tax purposes for the period 1 July 2010 to 30 June 2011? | 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 are an Australian citizen. Your spouse is a citizen of Country X. You and your spouse moved to Country X on date A during the 2009-10 income year with the intention of staying there for many years, although not permanently. You secured a job before moving to Country X and began working on arrival. Your employment contract was indefinite. You were living in rental accommodation in Australia. You sold your possessions in Australia including your furniture and car. Your only asset in Australia whilst living in Country X was a savings account. You lived in rental accommodation whilst living in Country X. You stayed in the one accommodation. Due to personal circumstances you and your spouse retuned to Australia on date B in the 2011-12 income year. You have returned to Australia on a permanent basis and have commenced employment. Whilst in Country X you paid all local and Federal taxes and lodged tax returns there. Your only source of Australian income for the period 1 July 2010 to 30 June 2011 was bank interest. You and your spouse are not eligible to contribute to the Public Service Superannuation Scheme or the Commonwealth Superannuation Scheme.

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

Reasons for decision: Summary: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose 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 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 an Australian resident for tax purposes if they satisfy the conditions of one of the three other tests. | Detailed Reasoning - The resides test: The ordinary meaning of the word reside, according to the dictionary meaning, 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. As you resided overseas from date A to date B, you were not a resident of Australia for taxation purposes 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. This test consists of two parts. Domicile Generally specking, persons leaving Australia temporarily would be considered to have maintained their Australian domicile unless it is established that they have acquired a different domicile of choice or by operation of law. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country. In your case, you left Australia on date A to live in Country X for a number of years, although not permanently. There is no evidence that your intention was to make your home indefinitely in Country X. Your accommodation there was rental. Therefore you are considered to have maintained your Australian domicile. Permanent place of abode 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. For the period 1 July 2010 until 30 June 2011 it is considered that you were not an Australian resident for taxation purposes under the domicile test for the following reasons: You and your spouse moved to Country X on date A with the intention of staying there for many years. You secured a job before moving to Country X and began working on arrival. Your employment contract was indefinite. You were living in rental accommodation in Australia. You sold your possessions in Australia including your furniture and car. Your only asset in Australia was a savings account. You lived in rental accommodation whilst living in Country X. You stayed in the one accommodation for the duration of your stay in Country X. Due to personal circumstances you and your spouse retuned to Australia on date B. Whilst in Country X you paid all local and Federal taxes and lodged tax returns there. Based on these facts, it is considered that you established a permanent place of abode in Country X. Thus you were not a resident of Australia under the domicile test as you established a permanent place of abode overseas. The 183-day test Under this test, a person is required to be actually present in Australia for a total period of more than half the year of income, unless it can be established that the person's usual place of abode is outside Australia and there is no intention to take up residence here. As you were not in Australia for 183 days or more, you were not a resident of Australia 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 Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS. As you and your spouse are not eligible to contribute to the Public Service Superannuation Scheme or the Commonwealth Superannuation Scheme, you were not a resident under this test. Your residency status from 1 July 2010 until 30 June 2011 From 1 July 2010 until 30 June 2011 as you were not a resident of Australia under any tests of residency outlined in subsection 6(1) of the ITAA 1936, you were not a resident of Australia 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.