Private ruling: Your residency status
Date of advice: 9 January 2017
Published: June 2017
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2016

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

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a citizen of Australia and your spouse and children are citizens of Country T. Your country of origin is Australia and your spouse and dependant's country of origin is Country T. You left Australia to live and work on Continent M with your spouse. You entered Continent M on a Country Z residency permit. Your Country Z residency permit is required to be renewed after a number of years. You are able to remain in Country Z as long as you or your spouse is employed. Your spouse has permanent employment. Your spouse does not require a visa as they are a Country T citizen living in Continent M. While living in Country Z your spouse gave birth to your dependants. You are working under an employment contract with Entity X, Country T. Your employment contract with the Entity X was for a number of years. On conclusion of your contract with Entity X, you have an employment contract with Entity Y for a number of years. Your foreign sourced income is assessable in Country T and Country Z. You decided that you wished to live permanently overseas prior to your departure from Australia. Since you first departed Australia you have returned on the following occasions for a number of occasions for short periods. You and your family rent a flat in Country Z. You have various assets in Country Z. Your assets in Australia consist of a number of bank accounts and some shares. You derive interest income from your Australian bank accounts and dividends from your Australian shares. Prior to your departure you were renting an apartment in Australia. Your sporting or social ties that you have in Australia consist of your family and friends. Your sporting or social ties that you have in Continent M consist of your spouse's family and a network of friends. You do not have any employment position being held for you in Australia. You have informed the Australian Electoral Office that you are living in Country Z and have applied for postal votes in subsequent elections. You have advised your bank as well as companies that you are a shareholder of that you are a non-resident for tax purposes. You were able to do so due to you being considered a non-resident in a previous private ruling that was issued. At the conclusion of your contract you intend to seek further employment opportunities on Continent M. You expect this pattern to continue for the years included in this ruling. Assumption(s) Nil.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 995-1 | Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision: Detailed Reasoning - Residency: An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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. These tests are: ● the resides test ● the domicile test ● the 183 day test ● the superannuation test. The first two tests are examined in detail in TAXATION RULING NO. IT 2650 INCOME TAX: Residency - Permanent Place Of Abode Outside Australia . 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 a resident of Australia for tax purposes if they satisfy the conditions of one of the other three tests. | Detailed Reasoning - Your residency status: Based on the facts that you have provided you will not satisfy any of the 4 tests for residency for the period that you will be living and working on Continent M. Accordingly, you are not a resident of Australia for income tax purposes under section 995-1 of the ITAA 1997 and subsection 6(1) of the ITAA 1997.