Private ruling: Residency
Published: November 2013
Ruling period: Year ended 30 June 2007 | Year ended 30 June 2008 | Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ending 30 June 2013
Date scheme commenced: 1 July 2006

Ruling: Question and answer: | Are you a resident of Australia for taxation purposes? | Yes.

Relevant facts and circumstances: You were born in Country Y and are a citizen of Country Y. You came to Australia a number of years ago for work purposes. Your spouse has a work specific visa which allows you to be in Australia. You and your spouse are self-funded workers. You and your spouse are volunteers with a worldwide organisation. You live in work provided accommodation in Australia. You and your spouse own personal items and some furniture in Australia. You have children. You have bank accounts in Australia. You have a bank account, credit card and personal items in Country Y. Prior to coming to Australia you lived with your parents in Country Y. You are not sure if you will continue your work in Australia or if you will apply for permanent residency in Australia when your visa expires. You have left Australia to visit family and friends along with work purposes since arriving in Australia for short periods. You file tax returns overseas. You have no paid employment in Australia. Neither you nor your spouse are currently or have ever been Commonwealth Government employees.

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

Reasons for decision: Summary: 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 residency status of individuals who temporarily live 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 (ordinary concepts) test: The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word ' resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test. Generally the Commissioner regards six months or 183 days as a considerable time when deciding an individual's behaviour is consistent with residing here. The Commissioner is also of the view that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here. Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides' test: (i) Physical presence in Australia (ii) Nationality (iii) History of residence and movements (iv) Habits and "mode of life" (v) Frequency, regularity and duration of visits to Australia (vi) Purpose of visits to or absences from Australia (vii) Family and business ties to different countries (viii) Maintenance of Place of abode. These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling TR98/17 residency status of individuals who enter Australia and Taxation Ruling IT 2650 . It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances. | Detailed Reasoning - (i) Physical presence in Australia: A person does not necessarily cease to be a resident because he or she is physically absent from Australia. In relation to this the AAT has stated that: "Physical presence and intention will coincide for most of the time but few people are always at home. Once a person has established a home in a particular place, even involuntary, a person does not necessarily cease to be resident there because he or she is physically absent. The test is, whether the person has retained a continuity of association with the place, together with an intention to return to that place and an attitude that the place remains home." You came to Australia a number of years ago for work purposes. You have returned to Country Y to visit family and friends on a number of occasions and have had work trips overseas, but still have spent the majority of the time in Australia. | Detailed Reasoning - (ii) Nationality: The nationality of a person is rarely a decisive factor in deciding whether or not a person resides in a location, however it is one factor that is considered along with all of the circumstances of each case. You are a citizen of Country Y and you were born in Country Y. | Detailed Reasoning - (iii) History of residence: You are self-funded workers. Prior to coming to Australia you lived and worked in Country Y. You live in work supplied accommodation in Australia with your family. | Detailed Reasoning - (iv) Habits and "mode of life": The Commissioner regards a person's habits and daily routines in regard to their domestic and business arrangements as strongly indicative of residency status. This is particularly relevant to determining the residency of a person who enters Australia, but is also relevant in assisting to determine the residency status of a person. You came to Australia for work purposes a number of years ago. You have worked in Australia for a number of years. Your spouse has a work related visa and you are their dependant. You live in work supplied accommodation with your spouse and children. | Detailed Reasoning - (v) Frequency, regularity and duration of visits to Australia: Where a person is living in a country and visits another, the frequency and regularity of their visits is an important factor to be considered in determining whether or not they are resident in that other country. Case law has shown that a taxpayer can be a resident of a country even if they only spend a short period of time in that country, for example the AAT found a taxpayer to reside in Australia despite the fact that he had only been present in Australia in the relevant income year for separate periods of only two weeks, three weeks and two and half weeks. A further decision found a taxpayer who had only been present in Australia for two separate periods of two weeks and ten days during a period of two years and seven months to be residing in Australia. You have been living and working in Australia for a number of years. You have returned to Country Y on a number of occasions to visit family and friends and you have gone to overseas for work purposes. | Detailed Reasoning - (vi) Purpose of visits to or absences from Australia: As discussed above you have left Australia on a number of occasions to visit family and friends and as apart of your work since arriving in Australia. | Detailed Reasoning - (vii) Family and business ties to Australia and the overseas country or countries: Case law has established that the family or business ties that an individual retains with a country are relevant in determining whether an individual has remained or ceased to be a resident. Family Your spouse and children live with you in Australia. Business or economic ties You are a self-funded worker in Australia and you were engaged in this work prior to leaving country Y. Assets · You have a bank account, credit card and personal items in country Y, · You have a bank account and personal items in Australia | Detailed Reasoning - (viii) Maintenance of Place of abode: The maintenance of a place of abode in Australia is an important factor when considering the residency status of a taxpayer. You do not have a permanent home in Australia. You and your family live in work provided accommodation. | Summary: As stated above it is important that not one single factor is decisive and the weight given to each factor depends on individual circumstances. There are several factors outlined above which indicate that you are a resident of Australia. Specifically; · You are a self-funded volunteer worker in Australia · You and your spouse have a work specific visa · You have been living and working in Australia for the past years with your spouse and children. Based on a consideration of all of the factors outlined above you are a resident of Australia according to ordinary concepts as your behaviour reflects a degree of continuity, routine or habit that is consistent with maintaining a continuity of association with Australia for the relevant periods.