Private ruling: Your residency status
Date of advice: 22 August 2016
Published: September 2016
Ruling period: Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 July 2014

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

Relevant facts and circumstances: You were born in country Y and are a dual citizen of Australia and country Y. You have a spouse and no dependants. You accepted an employment position with an overseas entity for an extended fixed period with the option of a further extension. You departed Australia to commence your employment in country V. Shortly after your arrival you were granted a residency permit in country V that will expire in a number of years. On arrival in country V you were provided with a fully furnished rental accommodation for the period of your employment. You and your spouse have exclusive use of this accommodation. It was planned that your spouse would join you in country V once you had found suitable accommodation and had settled in. However shortly after your departure, your spouse required a medical procedure which postponed their plans to join you until the following year. Since your departure you have returned to Australia on a number of occasions for short periods to visit your spouse who was recovering from a medical procedure. Prior to leaving Australia you were living in your family home. You had planned to place the home on the rental market however this was delayed due to your spouse's medical condition. Prior to your departure you disposed of most of your personal effects. The remaining items you have had, transported to country V. Your assets in Australia consist of your family home, banks accounts, credit cards and superannuation accounts. Your bank accounts hold minimal balances. You disposed of all other assets (including shares) prior to your departure. You informed the Australian Electoral Commission that you were no longer residing in Australia prior to your departure and cancelled all your memberships with Australian clubs and societies. You maintained your private health insurance while your spouse was in Australia. Your associations in country V consist of gym membership and membership to a sporting club. Neither you nor your spouse, have ever been an Australian Commonwealth Government employee. It is you and your spouse's intention to remain in country V for at least a number of years and potentially a further number of years. During this period you do not intend to return to Australia.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 995-1. | Income Tax Assessment Act 1936 Subsection 6(1). | Income Tax Assessment Act 1997 Subsection 6-5(2).

Reasons for decision: Detailed Reasoning - Residency: 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 (and permanent place of abode) test, • the 183 day test, and • 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 latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes. An individual need only satisfy the conditions of one of the four tests to be deemed a resident of Australia for income tax purposes. | 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 in country V. 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.