Private ruling: Resident for tax purposes
Date of advice: 29 November 2017
Published: April 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you a resident of Australia for tax purposes from the date you left Australia? | A1: No

Relevant facts and circumstances: You are an Australian citizen. You departed Australia on during the 2016-17 financial year. Your spouse accompanied you. Prior to leaving you resided an apartment you own in Australia. This property is currently rented. Your overseas destination was Country A. You obtained a Country A Working Holiday Visa. Your visa does not allow you to stay permanently in Country A. It allows you to stay and work for a period of two years. The purpose of your visit to Country A was to relocate to City B to live and work there. You and your wife have obtained employment in Country A. You are employed in Country A. You were originally employed for one year and this was subsequently extended. You intend to continue to extend the position. You are exploring options to obtain a longer term work permit. You do not intend to return to Australia on a permanent basis. You do not hold a return ticket to Australia. You leased an apartment in City B. You returned to Australia for seven days for a friend’s wedding in during the 2016-17 financial year. Your Country A assets include household effects, bank accounts and a credit card. You disposed of your motor vehicle and many household effects prior to your departure from Australia. The remaining household effects were gifted or stored at your parents’ houses indefinitely. You have friends in Australia, although a significant number of your friends have moved overseas in the last 12 months. Some of your friends from Australia now also reside indefinitely in City B. You do not maintain any sporting connections with Australia. You have joined sporting teams in City B. You have made a number of new friends through work, social and sporting connections. Neither you, nor your spouse, were Commonwealth Government of Australia employees. You have not removed yourself from the Australian Electoral Office roll however you have updated your address to your Country A address. You have suspended your Australian private health insurance. You have obtained health insurance in Country A. You have lodged a tax return in Country A.

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

Reasons for decision: Summary: Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes 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. The tests are: ● the resides test, ● the domicile test, ● the 183 day test, and ● the superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency. Accordingly you are not a resident of Australia for income tax purposes from the date you departed Australia under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936. The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.