Private ruling: Residency
Date of advice: 24 November 2017
Published: April 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 from your date of departure? | A1: No.

Relevant facts and circumstances: You were born in Australia. You have a Country X work visa which is renewable yearly. You own and live in an apartment in Country X. You have owned this apartment for a long period of time. You are employed in Country X. You left Australia for Country X in autumn 2017. Prior to leaving Australia you lived with a friend. You did not have your own place of residence. You own multiple investment properties in Australia. You have never lived in any of these properties. You intend to stay and work in Country X indefinitely. You are single and have no dependants. You have one adult child. You keep an Australian bank account. You keep Australian shares. You receive an Australian pension, which is taxed. You have an international driving license. You are not a member of the Public Service Superannuation Scheme or Commonwealth Superannuation Scheme.

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 from your date of departure from Australia.