Private ruling: Residency for Australian taxation purposes
Date of advice: 17 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 for taxation purposes? | A1: No.

Relevant facts and circumstances: You currently own a car and motorcycle in Australia which you are selling. You own a unit in Australia which you are renting out. You have bank accounts in Australia which are linked to the mortgage of the unit. Your immediate family live in Australia and you have extended family in Country A. You have spent the majority of the 2017 financial year living in Country B. You have a residency visa for Country B which was initially issued in 2011. You have a current international drivers licence. You intend to live in Country B for the foreseeable future. You have established ties to the community through gym membership and sports teams which play each week. You live in accommodation supplied by your employer. You have a permanent position working in Country B and your employer pays taxes in Country B. If your current employment ceases you would rent a house and seek alternative employment in Country B.

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

Reasons for decision: Summary: 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. | Detailed Reasoning - Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) Income Tax Assessment Act 1997 Subsection 995-1(1)