Private ruling: Residency
Date of advice: 6 September 2017
Published: January 2018
Ruling period: Year ended 30 June 201X | Year ended 30 June 201X | Year ended 30 June 201X | Year ended 30 June 201X | Year ended 30 June 201X
Date scheme commenced: 1 July 201X

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

Relevant facts and circumstances: You are citizen of Australia and Australia is your country of origin. You were granted permanent residency in country A on #. You and your family moved to country A on #. Your intention was/is to reside overseas permanently. You are permanently employed in country A. You do not have a job being held for you in Australia. You have previously returned to Australia to visit family and friends and take holidays. You own a home in country A. You shipped your belongings to country A. Your assets in country A include property, motor vehicle, motorbike, household effects and bank accounts. Your spouse and children moved back to Australia in #. Your spouse and children returned to Australia for health reasons. It is your intention to place your children in boarding school by # so your spouse can return to country A. Your spouse and children live in a property that you own. You stay at this property with your family when you visit Australia. You financially support your spouse and children while they are living in Australia. Your assets in Australia include two properties and joint bank accounts. You have advised Medicare and the Electoral Office that you are a foreign resident. You and your spouse are not eligible to contribute to the relevant Commonwealth super fund. Our records show that you have lodged as non-resident for recent years.

Relevant legislative provisions: 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) 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 . The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the: ● resides test ● domicile and permanent place of abode test ● 183 day test and ● Commonwealth superannuation fund test. The primary test for deciding the residency status of each individual is whether they reside 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 (ordinary concepts) test: The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word ' resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test. Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the ‘resides’ test: (i) Physical presence in Australia (ii) Nationality (iii) History of residence and movements (iv) Habits and "mode of life" (v) Frequency, regularity and duration of visits to Australia (vi) Purpose of visits to or absences from Australia (vii) Family and business ties to different countries (viii) Maintenance of place of abode. These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia and Taxation Ruling TR 98/ 17 Income tax: residency status of individuals entering Australia . It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances. You and your family moved to country A on #. Your intention was/is to reside overseas permanently. Your spouse and children moved back to Australia in #. Your spouse and children returned to Australia for health reasons. You were granted permanent residency in country A on #. You own a property which you live in, in country A. You shipped all your belongings to country A. Your spouse and children live in a property that you own. You stay at this property with your family when you visit Australia. You financially support your spouse and children while they are living in Australia. It is your intention to reside overseas permanently. You are/were not residing in Australia according to ordinary concepts due to your ongoing employment, living arrangements and intention to remain living and working overseas permanently. Although your family has returned to Australia you still remain a non-resident for tax purposes. | Detailed Reasoning - The domicile test: If a person’s domicile is Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. 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. The intention needs to be demonstrated in a legal sense, for example, by way of obtaining a migration visa, becoming a permanent resident or becoming a citizen of the country concerned. Your domicile of origin is the Australia. Your domicile changed to country A when you became a permanent resident on #. 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. The Commissioner is satisfied that you had a permanent place of abode outside Australia prior to your change of domicile to country A. | Detailed Reasoning - The 183-day test: Where 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 and do not intend to be in Australia for more than 183 days in any of the applicable financial years. 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 PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee. You and your spouse are not eligible to contribute to the relevant Commonwealth super fund. You are not a resident under this test. As you are not a resident under any of the tests you are not a resident of Australia for the period in question.