Private ruling: Residency
Date of advice: 26 March 2018
Published: June 2018
Ruling period: Year Ending 30 June 2016 | Year Ending 30 June 2017
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: No

Relevant facts and circumstances: You are an Australia citizen. You have been living outside of Australia for over two years. You have no formal contract but your position is considered to be indefinite. You were living outside of Australia on a business visa and have since been granted a work permit/residence visa that has to be renewed every 12 months. You have returned to Australia for short periods of time since you left. Your spouse and children were with you outside of Australia until you separated and they left to return to Australia. Your original living arrangements were paid for by your employer until you moved at your own expense. You recently moved into a rental free apartment in your employer’s building. You have a residential property in Australia. It was your main residence until you moved for work. You have been renting the property out since you moved. This is currently your only Australian sourced income. Your only assets in Australia are a rental property and a car you are signing over to your ex-partner. You own no assets outside of Australia. You have no plans to move back to Australia.

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

Reasons for decision: Detailed Reasoning - Residency: 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 contains four tests which will help us ascertain whether you were a resident of Australia for income tax purposes. These tests are: (i) the residence according to ordinary concepts test; (ii) the domicile/permanent place of abode test; (iii) the 183 days/usual place of abode test; and (iv) the Commonwealth superannuation test. You need only fall within one of these categories to be a resident of Australia and must fall outside all four to be a non-resident. The main test for deciding your residency status is whether you reside in Australia according to the ordinary meaning of the word resides. (i) the residence according to ordinary concepts test The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd edition , 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 have not lived in Australia for over two years and are not a resident for tax purposes from the date you departed. Nor are you a resident under the other tests.