Private ruling: Residency for Australian taxation purposes
Date of advice: 13 September 2018
Published: November 2018
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020
Date scheme commenced: June 2016

Ruling: Q1: Are you a resident for Australian taxation purposes? | A1: No. Having considered your circumstances and the relevant factors, you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 as you have not met any of the tests required to be considered a resident of Australia.

Relevant facts and circumstances: You were born in Australia. You are an Australian citizen and hold a current, valid Australian passport. In 20XX you were granted a Residency Permit by Country A which expires on X June 20XX. A Country A Residency permit allows an individual to sign a rental accommodation agreement, apply for loans, apply for certain other permits and licences, and access other services in Country A. A foreign individual needs to have a Country A employer in order to have this type of visa. On X June 20XX you departed Australia for Country A and commenced an employment contract dated X June 20XX with Employer B of Country A as an XYZ. The duration of the contract states for one calendar year, but you state that the contract is open ended after 12 months with a two month notice period, and to date you remain employed by Employer B of Country A under this contract on the basis that it is “open ended” with no formal date of cessation. You have requested clarification from your employer on this matter. In addition to salary, the employment contract with Employer B of Country A provides: furnished accommodation; school fees; an end of service gratuity; air tickets for you to Country A from Australia, and also for your spouse and children if they reside with you in Country A; medical care under a Country A health insurance policy. When you left for Country A, as well as flight luggage, you had two additional suitcases of unaccompanied baggage shipped from Australia to Country A, which contained all of your relevant personal belongings at that time. Shortly after arriving in Country A you formed the intention to remain indefinitely in Country A and have no current intention to relocate or return to Australia. When you first arrived in Country A you initially occupied temporary accommodation for one month upon arrival, before moving into the current employer-provided apartment where you have remained. You have an apartment in Country A supplied by your employer which is available for your exclusive use, even when you are travelling. You are the sole occupant and it is not shared or available to anyone else. The apartment is not a serviced one. You pay all the running expenses in relation to the apartment, including water, electricity and telephone bills. The employer-provided apartment came furnished with whitegoods and some other limited furnishings. You have provided the main bed and tables and chairs as well as peripheral items such as cutlery, crockery and linen. Should you resign from your current employment, you will need to relinquish this current accommodation. Your preference is to remain in this location, which you consider your main abode since your arrival in Country A and is where your personal possessions are kept and you wish to keep the continuity of association with this residence for the foreseeable future. You may move to different accommodation within Country A in the future, likely as sole occupant and for exclusive use even when absent or on holiday, and in that instance would likely have to provide most of your own furnishings. However, you intend to continue to remain in Country A into the indefinite future and would consider any new Country A residence as your permanent place of abode. You own a car in Country A. You have a Country A Bank Account. You pursue are engaged in a pastime as part of the Country A community. You do not intend your presence in Country A to be everlasting, but you enjoy your employment and lifestyle there and by July 20XX had formed an intention to remain indefinitely. You expect to receive follow on work and for your Country A visa to be renewed when it expires on X June 20XX. You have a spouse and X children you describe as dependents, who have remained in Australia in rented accommodation. All your children are still within the Australian education system. Your spouse was in full time employment but was made redundant recently. You financially support your children by way of their school fees and living expenses. You provide financial support to supplement your spouse’s income to assist with the children’s expenses. You also currently provide financial support to your spouse whilst they search for new employment. Your name has recently been removed from the lease of the property your spouse and children occupy in Australia. You assisted your spouse with obtaining this lease. Your spouse and children have not joined you in Country A as you wish for them to have specified school education and this is unavailable in Country A. Your spouse remains in Australia to care for the children whilst they complete their education and you describe your spouse and children as leading separate lives to you and will continue to do so well into the foreseeable future. You and your spouse are now separated. Your spouse registered in 20XX with Centrelink as being separated from you. In the Australian Census, your spouse listed their marital status as separated. Your spouse holds no joint accounts with you and has removed themselves and the children to a separate Medicare card. You do not have any personal items in the house in which your spouse resides in Australia and you do not reside there, but only stay during visits to maximise the time you spend with the children when in Australia. You previously owned a property in Australia that was the former main residence of the family. This property was sold in a specified income year. Neither you nor your spouse currently hold any investment properties jointly or individually within Australia. You are no longer on the Australian electoral role. You receive a relevant Commonwealth government payment. There is no requirement to be an Australian resident for this benefit payment. You have obtained travel insurance when visiting Australia in recent times. You hold two accounts used mainly for your investment share portfolio income; these accounts can only be closed in person in Australia. You recently closed bank accounts with XXX Bank and XXX Bank in Australia. You retain some Australian share investments from which you receive dividend payments. You retain an Australian postal address for administrative purposes for Australian post. You were involved in an Australian company, however relevant applications have been lodged and your spouse will take over the full administration of the entity. Since you departed for Country A you have made multiple trips back to Australia to visit family and when you do you stay in your spouse’s rented accommodation. While on these trips you have not spent more than a total of 183 days in Australia. One occasion, you travelled with your spouse and children to Country C to visit mutual acquaintances and for you to spend time with your children. You consider yourself to be a non-resident of Australia and have completed immigration documentation, for example flight departing/landing cards, on this basis. When you make these visits you bring only the relevant clothes and items required for a temporary visit to Australia. There are no personal belongings of yours kept in the rental property occupied by your spouse and children when you are not in Australia. There have been no visits from your spouse or children to Country A. You do not meet the Commonwealth superannuation fund test.

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