Private ruling: Residency
Date of advice: 12 August 2016
Published: September 2016
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20YY | Year ending 30 June 20ZZ | Year ending 30 June 20AA | Year ending 30 June 20BB
Date scheme commenced: 1 July 20WW

Ruling: Q1: Will you be a resident of Australia for tax purposes from the time that your employment in Australia concluded? | A1: 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 were born in and are a citizen of Australia. You have no intention of returning to Australia at any time in the future and all planned leave periods will be spent in Country B with your family. You went to Country B in 20VV with your spouse and spent nine months travelling around Country B before settling in Country B in 20WW. You sold all your household effects prior to travelling and relocating to Country B. You and your spouse leased a property in Country B from 20WW and have established a permanent home in Country B. You and your spouse have purchased land in Country B that is held in your spouse's name due to foreign residents being unable to purchase property in Country B. You intend to build a home on this land in the future. Your child was born in Country B and it is your intention for your child to attend an educational facility in Country B. You are a resident of Country B and hold a marriage visa which allows you to stay in Country B without having to leave the country. This visa is required to be renewed on a yearly basis. You have de-registered your Australian vessel and have donated it to your spouse to be utilised in their related business. You were previously employed as a fly in fly out worker in State X and returned to Country B when on leave. You commenced an employment contract with employer A in 20XX. This contract expires during 20XX however you anticipate that it will be renewed until 20YY. You will reside in an apartment that has been supplied by your employer while in Country C. You and your family have been issued with Country C residence cards. You intend to return to Country B once your employment contract is complete and assist your spouse with the operation of the business. You currently own X rental properties in Australia which will continue to be rented out through real estate agents. The rent on these properties covers associated costs and therefore there is no requirement for you to provide further funds from overseas. You continue to hold a bank account and several mortgages for your rental properties with a financial institution. You have a self-managed superannuation fund within Australia of which you are a director of the trustee company along with your parent. You do not hold private health insurance in Australia. You are not a member of any clubs in Australia. You have removed yourself from the electoral roll.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(1) These reasons for decision accompany the Notice of private ruling. | While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. | 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. | Relevant to your situation are the first two tests which are examined in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia. | 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'. | In your case, there are various factors that indicate that you will not be residing in Australia during the period you are in Country B. These factors include the following: You will be living and working in Country C and then returning to Country B once your contract has expired; Your spouse and child are living with you in Country B; You have a lease on a property in Country B; and You have also purchased land in Country B with the intention to build a home. | Based on the facts of your case, the Commissioner accepts that you do not reside in Australia according to the ordinary meaning of the word; therefore, you are not a resident of Australia for taxation purposes. | 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. | Generally speaking, persons leaving Australia would be considered to have maintained their Australian domicile unless it is established that they have acquired a different domicile by choice or by operation of law. | It is clear from the case law that a person's permanent place of abode cannot be ascertained by the application of any hard and fast rules. It is a question of fact to be determined in the light of all the circumstances of each case. | The courts have considered a person's 'place of abode' is where they consider 'home'. In R v Hammond (1982) ER 1477, Lord Campbell CJ stated that "a man's residence, where he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression." | In your case you intended to stay in Country B indefinitely; You have rented a home since 20WW and remained there since; You will be temporarily working and living in Country C and intend to return to Country B on completion of your contract; You have purchased land with the intention to build a permanent home. You will be residing there with your spouse and child; Your child will be attending an educational facility in country B. | Based on these facts, it is therefore considered that you will establish a permanent place of abode in Country B. | The 183-day test | Under this test, if you are actually present in Australia for more than half the income year, whether continuously or intermittently, you may be said to have a constructive residence in Australia unless it can be established that your usual place of abode is outside Australia and you have no intention to take up residence here. | As you do not intend to return to Australia and be present for more than 183 days continuously or intermittently you do not meet this test. | As a result, you are not a resident under this test. | 4. The superannuation test | You will be a resident if you are eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or you are the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS. | Neither you, nor your spouse, are contributing members of a Commonwealth Superannuation fund. | Therefore, this test does not apply to you. | Your residency status | 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.