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

Ruling: Q1: Are you a resident of Australia for tax purposes for the period July 2010 to September 2011? Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision: Detailed Reasoning - Residency: 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 (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. 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 meet 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'. You were residing in country A as evidenced by: · living in rental accommodation · you were working in country A · your spouse accompanied you , and · you lived and worked in country A so that you could spend time with family. Therefore, you were not considered to be residing in Australia. | 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 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. While your domicile of birth was Country A you changed your domicile by choice to Australia when you became a permanent resident of Australia. You have not abandoned you permanent residency of Australia and you only returned to Japan for a short time to visit family and friends with the intention of returning to Australia. Therefore you have maintained your Australian domicile. 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. 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. In your case, · You own a residence in Australia, · You lived in rental accommodation while in country A, · You do not have any assets in Country A, · you rented out your residence while you are away, and · Your reason for working and living in country A was to spend time with family. The Commissioner is not satisfied that you have a permanent place of abode outside Australia. As your domicile is Australia and you do not have a permanent place of abode outside Australia you are a resident of Australia. | Detailed Reasoning - The 183-day test: This test does not apply to as you were not in Australia for over 183 days during your absence. | 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. You are a resident under this test as you are not a member of the PSS or the CSS, a spouse of such a person, or a child under 16 of such a person. | Detailed Reasoning - Your residency status: You are a resident of Australia under the domicile test.

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. | Relevant facts: Country A is your country of origin and you are a country B citizen. | You are a permanent resident of Australia. | You departed Australia in July 2010 to spend time with family in country A. | You returned to Australia in September 2011. | You worked while you were in country A. | Tax has not been withheld from your income. | You did not return to Australia at any time while living in country A. | You have a home in Australia which was rented out while you were in country A. | You received rent monthly from September 2010 until June 2011. | Your spouse accompanied you in country A. | You and your spouse have never been Commonwealth Government of Australia employees.