Private ruling: Residency
Date of advice: 25 February 2019
Published: May 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: Yes

Relevant facts and circumstances: You were born in Country Y. You are a citizen of Country Y. You are not a permanent resident of any other country. You have entered Australia on a Guardianship Visa which allows you to be in Australia from XX XXX 2017 to XX XXXX 2025. You intend on being in Australia for the duration of your visa. You arrived in Australia with your child in the 2018 income year. Your child is attending school in Australia. You have purchased an apartment in Australia. You have purchased furniture and a car in Australia. You care for your child in Australia. You return home to visit your spouse during school holidays. Your spouse comes to Australia to stay with you and the children for up to 2 weeks a year. Your spouse is paying for all your expenses while you are in Australia. You do not earn any income in Australia. You pay tax on your income in Country Y. You are a tax resident of Country Y.

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) advises that where you are an Australian resident for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a non-resident of Australia for taxation purposes, your assessable income includes only income from an Australian source. Subsection 995-1(1) of the 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: 1. the resides test 2. the domicile test 3. the 183 day test 4. the superannuation test The first two tests are examined in detail in Taxation Ruling IT 2650: 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 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 Macquarie Dictionary, 2001, rev. 3rd 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'. 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. You arrived in Australia in the 2018 income year with your child. You are on a Guardianship Visa which allows you to remain in Australia until XX XXXX 2025. You intend on being in Australia for the duration of your visa. You care for your child full-time while they attend school in Australia. You purchased an apartment in Australia along with furniture for the apartment and a car. You visit your spouse during the school holidays and your spouse comes to Australia to stay with you and your child for up to 2 weeks a year. You are therefore residing in Australia according to ordinary concepts and you are a resident of Australia for tax purposes according to this test. | Detailed Reasoning - Your residency status: You are a resident of Australia for taxation purposes.