Private ruling: Residency
Published: March 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

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


Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). | Income Tax Assessment Act 1997 Subsection 6-5(2). | Income Tax Assessment Act section 995-1(1).

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. 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) and section 995-1(1) of the ITAA 1997. 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 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. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd 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'. Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia considers the residency status of individuals entering Australia and states the length of time in Australia is an important factor when considering whether an individual resides here. However, the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. An individuals behaviour over the time spent in Australia needs to reflect a degree of continuity, routine or habit consistent with residing here to be considered a resident under this test. You advised that: · you arrived in Australia with your spouse and children, · you have not left Australia since your arrival, · you moved to Australia to take up an open ended employment contract. You are still working for the same employer. · you rent accommodation in Australia as your temporary visa does not allow you to buy, · your temporary visa expires in a few years and you will apply for an extension to remain in Australia, · you have a bank account and a credit card in Australia, · it is your intention to remain in Australia indefinitely, and · you have social connections in Australia, Based on this information you are an Australian resident for tax purposes as your behaviour while in Australia reflects a degree of continuity, routine or habit that is consistent with residing here. | Detailed Reasoning - Conclusion: As you are considered to be a resident of Australia for tax purposes under the resides test, it is not necessary to consider the remaining tests of residency. You are a resident of Australia for tax purposes under section 6-1 of the ITAA 1936 and section 995-1(1) of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You and your spouse are country B citizens. | You have been permanent residents of country A for a number of years. | You moved to Australia on a long term temporary visa. | The purpose of your visit to Australia is to work. | You will remain in Australia indefinitely if you are able to. | Your visa expires in a few years and you will apply for an extension. If the extension is not granted you will have to leave Australia. | You have not left Australia since first arriving. | Your spouse and children live with you in Australia. | You have other children who live independently in Australia. | You rent a property in Australia as your temporary visa does not allow you to buy a property. | You have a bank account and credit card in Australia. | You have a property in country A which is rented out while you are in Australia. | You have a mortgage, a current account, and receive rent in country A. | You pay tax on your rental income in country A. | You are moved to Australia to take up an open ended contract. You are still working for the same employer. | You used to have social connections in country A. | You and your spouse are not/have not been Commonwealth Government of Australia employees. | You are over 16 years of age.