Private ruling: Residency
Date of advice: 6 September 2017
Published: December 2017
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 July 2009

Ruling: Question and answer | Are you a resident of Australia for taxation 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 an Australian citizen and Australia is your country of origin. You left Australia in # to work in country A for your previous Australian employer. You lived with your parents in the family home prior to your departure. You resigned from your previous Australian employer in # and accepted a new job with your current Australian employer and continued to live in country A. While living in country A you initially entered on a # visa, you were then issued a #, then a #visa. None of these allowed you to live in country A permanently. You have made short trips back to Australia to visit family and take holidays each year since you first departed. You purchased land in Australia before you moved to country A and built a home on it with the intention of it being your main residence. You have never lived in the property due to your ongoing employment in country A. In # you purchased a rental property in Australia which remains a rental property today. You purchased another property in Australia in # which is also a rental property. You lived in a rented fully furnished apartment in country A which was paid for by your employer. You met your current spouse in country A in # and moved back to Australia in #. From # you and your spouse lived together in your rented apartment in country A before moving to Australia. You did not have any assets in country A. In Australia you had properties, bank accounts and credit cards. You are not eligible to contribute to the relevant Commonwealth super fund.

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

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 . The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the: ● resides test ● domicile and permanent place of abode test ● 183 day test and ● Commonwealth superannuation fund test. The primary test for deciding the residency status of each individual is whether they reside in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established. | Detailed Reasoning - The resides (ordinary concepts) test: The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word ' resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test. Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the ‘resides’ test: (i) Physical presence in Australia (ii) Nationality (iii) History of residence and movements (iv) Habits and "mode of life" (v) Frequency, regularity and duration of visits to Australia (vi) Purpose of visits to or absences from Australia (vii) Family and business ties to different countries (viii) Maintenance of place of abode. These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia and Taxation Ruling TR 98/ 17 Income tax: residency status of individuals entering Australia . It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances. You moved to country A in #. You had permanent employment in country A. Your intention was to reside in country A initially for a specific period of time which ended up being extended. You moved to country A on your own. The reason for their relocation was to take up a work contract with your employer You lived in rental accommodation provided by your employer. From # you and your spouse lived together in your rented apartment in country A before moving to Australia. You did not have any assets in country A. In Australia you had two rental properties. You made several short visits to Australia to visit family, holiday and attend work related meetings. You financially support your family in Australia by sending a portion of it to the joint bank account held with your spouse in Australia. You were not residing in Australia according to ordinary concepts due to your ongoing employment, living arrangements and intention to remain living and working overseas indefinitely. Although your immediate family and assets are in Australia you remain a non-resident for tax purposes until you returned in 2014. | Detailed Reasoning - The domicile test: If a person’s domicile is Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. 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 his or her home indefinitely in that country. The intention needs to be demonstrated in a legal sense, for example, by way of obtaining a migration visa, becoming a permanent resident or becoming a citizen of the country concerned. Your domicile of origin is Australia and your domicile of choice was country A. The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives. A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere. The Commissioner is satisfied that you had a permanent place of abode in country A | Detailed Reasoning - The 183-day test: Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person’s usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You were not in Australia for more than 183 days in any of the applicable financial years. You are not a resident under this test. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident if that person is eligible to contribute to the PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee. You and your spouse are not eligible to contribute to the relevant Commonwealth super fund. You are not a resident under this test. As you are not a resident under any of the tests while in the Foreign Country you are not a resident of Australia for the period in question.