Private ruling: residency
Ruling period: Year ended 30 June 2010
Date scheme commenced: 1 July 2009

Ruling: Question and answer: | Were you a resident of Australia for taxation purposes after you left Australia? | No.


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. In your case you left Australia to go overseas. You left Australia indefinitely. You are therefore not residing in Australia according to ordinary concepts and you are not a resident of Australia for tax purposes according to this test. | Detailed Reasoning - The domicile test: If a person has their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. | Detailed Reasoning - Domicile: There are essentially 3 types of domicile that an individual can have: 1. the domicile of origin; 2. the domicile of choice; and 3. The domicile of dependency. Basically, the domicile of origin of an individual is where the individual was born. 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. In relation to domicile of dependency, such a domicile will normally only exist in relation to minors or individuals who are of unsound mind. In your case, you were born in Australia and have lived there until you moved overseas, therefore, your domicile of origin is Australia. Although you intend to remain overseas indefinitely, you do not have permanent residency or citizenship of the overseas country. Therefore, you have not proven an intention to make Singapore your home indefinitely and your domicile remains Australia. As your domicile is Australia, you will be a resident of Australia for tax purposes unless the Commissioner is satisfied that you have a permanent place of abode outside of Australia. | Detailed Reasoning - Permanent place of abode: 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. 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. In your case: You left Australia to marry your spouse You and your spouse have purchased a home overseas You are leaving Australia indefinitely You have a work contract overseas which is open ended. The Commissioner is satisfied that you have established a permanent place of abode outside Australia therefore you are not a resident under this test. | Detailed Reasoning - The 183 day test: When a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You were not in Australia for more than 183 days during the financial year ending 30 June xxx and therefore 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. In your case, neither you, nor your spouse, are current Commonwealth government employees and therefore you are not able to contribute to the abovementioned superannuation schemes. Therefore, you are not a resident of Australia under this test. | Detailed Reasoning - Your residency status: As you do not meet any of the above tests of residency, you are a non-resident of Australia for taxation purposes for the financial year ended 30 June xxx.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You are a citizen of and were born in Australia. | You have an employer sponsored visa. | You went overseas to get married. | You are not sure if you will return to Australia or not. You may come back to Australia, you may go to another country or you may stay the overseas country. | You do not have a fixed date as to when you will return to Australia. It will depend on career opportunity and schools for your child. | You have not been back to Australia since leaving. | You have bank accounts overseas. | You have a rental property in Australia. | You have a car and furniture in Australia along with bank accounts and managed funds along with a super fund. | You currently have a work contract overseas. This contract is open ended and does not have a fixed termination date. | No family members accompanied you overseas. | Your family and friends still live in Australia and you have contact with them. | Your spouse's family and friends live overseas. | You have never been a Commonwealth government employee.