Private ruling: Residency
Date of advice: 4 June 2018
Published: August 2018
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2016

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

Relevant facts and circumstances: You were born in Australia. Your spouse went overseas for work purposes in the 2017 income year. You joined them overseas a few days later. Your spouse has an ongoing employment contract overseas. You do not work overseas. You have a spouse sponsored residency visa for Country Y and you can stay in Country Y for as long as your spouse is employed. Your spouse has an employer sponsored visa for Country Y. You and your spouse rent an apartment in Country Y. Your spouse’s employer provides them with an accommodation allowance. You took all household and personal items with you to Country Y. You have sold your family home in Australia. You have two properties in your name in Australia and one jointly owned with your spouse. You will spend five days in Australia in the 2018 income year in Australia. You put on your outgoing passenger card when leaving Australia that you were leaving permanently. You and your spouse are not eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(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. 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 under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.

ATO view documents: Taxation Ruling TR 98/17 – Income tax: residency status of individuals entering Australia | Taxation Ruling IT 2650 – Income tax: residency – permanent place of abode outside Australia | Taxation Ruling IT 2650A (Addendum) – Income tax: residency – permanent place of abode outside Australia | Other references (Non ATO view – example court cases, etc): Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01 | Dempsey and Commissioner of Taxation [2014] AATA 335 (29 May 2014): Federal Commissioner of Taxation v Miller [1946] HCA 23; (1946) 73 CLR 93. | Levene v Inland Revenue Commissioners [1928] UKHL 1; [1928] AC 217. | Applegate v Federal Commissioner of Taxation [1978] 1 NSWLR 126