Private ruling: Residency status
Published: February 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: 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 Country X and you are a citizen of Australia. Your spouse was born in Australia and is a citizen of Australia. You became a permanent resident of Australia a number of years ago. You and your spouse have gone to Country Y permanently. You and your spouse have a tier 2 skilled migrant visa to enter Country Y which is for x years. You intend on extending this visa and are able to apply for leave to stay in Country Y after x years which you also intend on doing. You have no intention to return to Australia to live. You will return to Australia on holiday to visit family and friends from time to time. You have a work contract in Country Y. You are currently staying in temporary accommodation until you are able to find a suitable rental property. You were renting a property in Australia prior to going to Country Y. You have a rental property in Australia which will continue to be rented out. You removed your name from the electoral roll. You suspended your medical cover in Australia. Neither you nor your spouse are currently or have ever been Commonwealth government employees. You are over the age of 16.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) | Income tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Subsection 995-1(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 (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 Income tax: residency - permanent place of abode outside Australia. 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 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 and your spouse have gone to Country Y to live and work permanently. · You do not intend on returning to Australia to live. · You will come back to Australia only to visit family and friends. · You will apply to stay in Country Y permanently when you are allowed. You are not a resident under this test as you are not residing in Australia according to ordinary concepts. | Detailed Reasoning - The domicile test: If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. You are a citizen of Australia and you were born in Country X therefore, your domicile of choice is 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. You and your spouse have gone to Country Y to work and live. You intend to apply to stay in Country Y on a permanent basis as soon as possible. You do not intend on returning to Australia to live. You have proven an intention to adopt Country Y as your domicile of choice. You are not a resident under this test. | Detailed Reasoning - The 183-day test: You do not intend on being in Australia for more than 183 days in any 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 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. Only Commonwealth Government employees are eligible to contribute to the PSS and CSS. As you and your spouse were not Commonwealth government of Australia employees you will not be treated as a resident under this test. | Detailed Reasoning - Your residency status: You are not a resident of Australia for taxation purposes.