Private ruling: Residence
Published: February 2012
Ruling period: Year ending 30 June 2011 | Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 1 July 2010

Ruling: Questions and answers: | Are you a resident of Australia for tax purposes? | Yes

Relevant facts and circumstances: You are a foreign and Australian citizen You left Australia 2010. The purpose of your travel is to be at your spouse's side. You intentions to stay in the overseas country are support your spouse's ongoing mission there. You have no plans to return to Australia unless your spouse's ministry work directs you back to Australia. You have notified Centrelink that you will be living away from Australia for an indefinite period. You have not returned to Australia since leaving in June 2010. You have a permanent place to live in the overseas country. Your assets in the overseas country include bank accounts. Your assets in Australia include bank accounts and shares. You sold your home in Australia when you were informed of your transfer to the overseas country. You pay income tax in the overseas country on your income as beneficiary of your late father's pension. Your spouse and dependents have accompanied you. You have social connections with your parish congregates in the overseas country. Neither you or your spouse have ever been in the employ of the Commonwealth of Australia.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | 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. 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 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: o the resides test, o the domicile test, o the 183 day test, and o the superannuation test. The first two tests are examined in detail in Taxation Ruling IT 2650. The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. Although the question of whether a person resides in a particular country is a question of fact, the courts have referred to and taken into account various factors considered to be relevant. These are: · whether the person is physically present in that country at some time during the year of income · the history of the person's residence and movements · if the person is a visitor to the country, the frequency, regularity, duration and purpose of the visits · if the person is outside the country for part of the relevant income year, the purpose of the absences · the family and business ties which the person has with the particular country, and · whether a place of abode is maintained by the person in the relevant country or is available for his or her use while there. You have been absent from Australia You are a foreign citizen. Your spouse and dependents have accompanied you. You have sold your home in Australia. On the weigh of your circumstances, you are not a resident of Australia under the resides test. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia. | Detailed Reasoning - Domicile: Domicile is a legal concept, determined according to the Domicile Act 1982 and common law rules established by private international law cases. Generally speaking, persons leaving Australia temporarily would be considered to have maintained their Australian domicile unless it is established that they have acquired a different domicile of choice or by operation of law. 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 their home indefinitely in that country, for example, through having obtained a migration visa. You are a citizen of a foreign country and Australia. You have established in the foreign country a domicile of choice whereby you can make your home indefinitely. You are therefore not a resident under the domicile test. | Detailed Reasoning - The 183 day test: Under the 183 day test, a person is a resident of Australia if they are actually physically present in Australia for more than 183 days in an income year unless the Commissioner is satisfied that their usual permanent of abode is outside of Australia and they have no intention of taking up residence here. As you were not present in Australia for more than 183 days in any of the income years, you are not a resident under this test. | Detailed Reasoning - The superannuation test: A person will be considered a resident under the Commonwealth superannuation fund test if they currently contribute to certain superannuation funds for Commonwealth government employees. The eligible funds are funds: · established under the Superannuation Act 1976 (such as the Commonwealth Superannuation Scheme), or · established under the Superannuation Act 1990 (such as the Public Sector Superannuation Scheme), or · the spouse or child under 16 of a person covered by either of the above funds. You and your spouse have never been Commonwealth government employees and therefore you are not able to contribute to the abovementioned superannuation schemes. Therefore, you are not a resident under this test. | Detailed Reasoning - Your residency status: As you do not meet any of the above tests, you are not a resident of Australia for tax purposes.

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