Private ruling: Residency
Date of advice: 23 June 2017
Published: October 2017
Ruling period: Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2017

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: No

Relevant facts and circumstances: You were born in Australia. You are a citizen of Australia. You were offered a permanent full time job in Country X. You have signed the employment contract. You and your family will depart for Country X. You will enter the Country X on a residency visa. Your visa is supplied by your employer and valid for three years. Your employer does not provide you with accommodation. You have signed a rental agreement in Country X. Your spouse and children will accompany you to Country X. You have advised your children’s Australian school of their leaving and your children have been enrolled in a school in Country X. You have obtained a Country X driver’s licence ID card. You will purchase furniture and white goods; you will open a bank account and credit card for your family; you will purchase a car for your spouse. You live in your own family house in Australia. You intend to rent the property out; you have engaged a real estate agent to manage the property. You will either give away or sell your household effects. You will ship your personal items to Country X. You have a bank account which will be used for the rental property and a superannuation account in Australia. You intend to live in overseas permanently. You have no intentions to permanently resettle in Australia. You have advised the Australian Electoral Commission that you are departing Australia. You have advised Medicare to have your name removed from their records. You have advised your private health insurance provider to have your policy cancelled. You and your spouse have never been Commonwealth Government of Australia employees for superannuation purposes.

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 taxation 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 (and permanent place of abode) test, ● the 183 day test, and ● the superannuation test. The first two tests are examined in detail in Taxation Ruling IT 2650 – Income tax: residency – permanent place of abode outside Australia. The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes. 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 taxation purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from the day you departed for Country X.