Private ruling: Residency
Date of advice: 5 December 2018
Published: March 2019
Ruling period: Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you an Australian resident for tax purposes until X 2017? | A1: Yes | Q2: Are you an Australian resident for tax purposes post X 2017? | A2: No

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a citizen of Country X You have been a Permanent Resident Visa holder of Australia for many years. You have no spouse or children. You have 100% ownership of a company. You are the CEO of this company. You have since set up a Country W subsidiary company, which is wholly owned by your Australian company. You are an employee of the Country W subsidiary and from X 2017 you have been receiving wages, net of taxes, into your Country W bank account. For a few years you have been splitting your time between Country W and Australia. You entered Country W, on an XX Visa. Prior to your departure from Australia on in X 2017, you had been in Australia for over 15 years. You departed Australia with the intention of growing and expanding your business from a base in Country W. This includes business both within Country W, as well as other potential business opportunities in Country X, Country Y and Country Z. Since late 2017, you been residing in the home you own in Country W and occupying the property as your main residence. You purchased this property in mid 2016. Since X 2017, your personal possessions have been located in your home in Country W. You have a limited amount of clothing stored at a hotel in Australia for convenience when you travel back to Australia for business. You have no other personal possessions in Australia. During the year ended 30 June 2016 and for the majority of the year ended 30 June 2017, you had permanent rental accommodation available for your use in Australia and would stay in that property during your frequent travel back to Australia. Your home included beds, kitchen necessities, living room sofa and a TV. It also had unique features such as a massage room with required massage items and a mediation room with a water feature. You surrendered your rental property in X 2017. When travelling back to Australia between X 2017 and Y 2018 you have been staying in hotels. You now spend the majority of your time in the Country W. You have no family residing in Australia, your parents and sibling both live in Country X. Being geographically close to your parents and sibling has also been a relevant factor in your relocation to Country W. Similarly, being in a similar time zone has made it easier to communicate more frequently with your family. You have an ongoing gym membership in Country W. You have no memberships in Australia. You undertake vacation in other countries once or twice a year. You hold cash in personal bank accounts in Australia and Country W. You have had no vehicle available to you in Australia since the start of 2018. You have a Country W driving licence and have a car available to you in Country W. You have cancelled your Australian private health insurance in early 2018. You have had health insurance in Country W since 2017. You are not a member of the CSS or PSS. You have filed Country W tax returns for the calendar years 2015, 2016 and 2017. These tax returns stated you were a resident of Country W.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 995-1(1). | Income Tax Assessment Act 1936 subsection 6(1) Detailed reasoning | Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. | 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' and 'permanent place of abode' test | ● the 183 day test, and | ● the Commonwealth superannuation fund test. | If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. | Application to your circumstances | We consider that you were an Australian resident for taxation purposes under the resides test until you gave up your rental property in Australia on X 2017. Post this date you will be considered to be a non-resident as you do not satisfy any of the tests. You would not be an Australian resident under normal concepts and in regard to the domicile and permanent place of abode test; we consider that even if your domicile remained Australia, you had a permanent place of abode in Country W.