Private ruling: Residency
Date of advice: 1 December 2016
Published: May 2017
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20TT

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

Relevant facts and circumstances: Your country of origin is Australia and you are a citizen of Australia. You have a spouse and X teenage children. Prior to 20UU you worked in Australia. You accepted a job in country Y with a business. You left Australia to take up the employment and to live in Country Y. You sold all of your assets and removed your name from the electoral roll. Your spouse (to be) moved to Country y a couple of years later. You were married a few years later. Your country y address is noted as your residential address on Tax Office records. You left the employer in Country y to take on a business partnership in Country Y. Since living in Country y, you have a Relevant work permit and residence visa. This visa is an employer sponsored work visa and is renewable every 12 months. When you moved to country Y in XXXX you were provided accommodation by your employer - you live in the same house today. You remained living in the house but you rented the house in your own name (from XXXX to XXXX). In XXXX your employer purchased the house and allowed you to live there. You were unable to purchase the house yourself because under Country Y law, a foreigner is not permitted to own real property in Country Y. You can only obtain a permanent residence in Country y if you surrender your Australian passport. Your first child was born in XXXX in Australia and your spouse returned to country Y with your child to all live together. It was decided in early XXXX that for medical and educational support reasons it would be better for your child to be raised in Australia. Your spouse and child returned to Australia in XXXX. You jointly purchased a house in Australia in XXX for your spouse and child to reside in. In the year ended 30 June 20VV you transferred your share of the property into your spouse's name. You made a capital gain on the transfer and you paid tax on the capital gain at non-resident rates. Your spouse continues to live in Australia and you in country Y. The reason why your spouse and children do not live with you in Country y is predominantly due to the lack of health and educational facilities in the area of Country y where you live. When you return to Australia you stay at the house with your spouse and children. You have significant assets in Country Y. You have significant social ties to Country Y. You visit Australia for family and business purposes and opportunities to derive new business for country Y. You regularly bring country Y colleagues or guests with you when visiting Australia. They do not stay at the family home. On each trip you spend approximately 50% of your time with your family and the other half for business purposes. When you enter Australia you complete the immigration card as a non-resident visiting for business purposes. You do not get paid in Australia for any of the business you conduct in Australia. While in Australia, your country Y home is not available for use by anyone else. You generally do not remain outside of Country Y for extended periods of time as you need to be in Country Y to ensure the smooth operation of your business. You do not have any assets in Australia as your spouse has property in their name only. You do not have any bank accounts in Australia. You transfer money from your country Y bank account to your spouse to support him/her and your children. Neither you nor your spouse has ever been Commonwealth Government of Australia employees for superannuation purposes. You have been treated as a resident of Country Y by the country y tax authorities since XXXX and pay tax on your income in Country y. Visits to Australia - prior to 1 July 2014 You regularly visit Australia to see your spouse and children. Prior to the 20WW-XX income year, you were not in Australia for more than 183 days in any given financial year. Your visits back to Australia did not exceed three weeks each time, except for one occasion which was for XX days as your child was unwell. Prior to 2000 your visits to Australia were only two to three days each. Visits to Australia - 2014-15 income year During the 20WW-XX income year, you spent approximately 245 days in Australia. This was for personal reasons. Despite spending more time in Australia, ● you were able to maintain your Country y business through the use of remote technology ● you continued to manage your business commitments in Country y ● your social and other interests in Country Y remained largely unchanged ● all of your assets in Country Y remained the same ● Your home in country Y remained available for you to use and you did not rent the property out during your absences. You did not form an intention to relocate to Australia in the 20WW-XX income year. In the 20YY income year, you entered into a Share Sale Agreement with an Australian based business for the sale of your shares in the country Y business. Under the agreement your shares will be sold in two lots. The first lot of shares were sold in the 20YY income year and the second will be sold in the 20AA income year. While your interests in the country Y business diminished somewhat, you still retained some equity in the country Y business and accordingly had ongoing obligations there. It was a condition under the sale to the Australian company that you continue to travel to and spend significant time in Country y during 20YY (i.e. at least XX days during 20YY). In particular, your activities in country Y remained the same during the year ending 30 June 20YY as they had in prior years. Specifically you: ● Spent a significant amount of time in country y to oversee your business and employment requirements; ● maintained the same accommodation, vehicle, staff, drivers, mobile phone and email address in Country Y; ● maintained your Country Y banking facilities; ● continued to receive an country Y salary and paid full Country Y tax on this income; As in the year ended 30 June 20XX, you spent more than 183 days in Australia (you spent XXX days in Australia in that year). This was due to the following factors: ● You were required to spend more time in Australia to negotiate the sale with the Australian company, particularly in late 20XX. As the sale approached completion in late 20XX, you remained in Australia full time so that negotiations could be concluded without interruption; and personal reasons. Despite the above, you continued to meet your obligations to the Country y business. Moreover, post the sale of the first lot of shares, you continued to act as director of the country Y business and was paid a director's salary for your work. That salary was taxed in Country y. Your directorship will continue until the end of 20ZZ.