Private ruling: Residency
Published: December 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2013

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 a citizen of country A and you were born in country A. You entered Australia on a Visa which allows you to live and work in Australia as long as you remain a citizen of country A. You have not been granted permanent residency in any other country. You left Australia to take up a employment contract (with the possibility of extension) in country B. You have a multiple entry work visa which does not allow you to live in country B permanently. Your employer can request that you are granted permanent residency. You lived in your own home in Australia. You live in a company apartment provided by your employer in country B. Your assets in country B include two bank accounts, personal and household effects. In Australia your assets include: Motor vehicle $ Household effect (jointly) Approx $ Home workshop tools $ Property with mortgage of $ Two joint bank accounts $ Your household effects remain in Australia as your spouse does not join you until later. You intend leaving larger furnishings with the house which you intend making available for rent. You intend to receive rental income from your property in Australia. You will return to Australia for occasional business meetings with Australian based consultants. You do not have a position or job being held for you in Australia. In Australia your social and sporting connections include: • Past work colleagues • Your son, future daughter in law, your sister and her family, and friends. • You are an international umpire In country B you have many professional contacts. You and your spouse have never been a Commonwealth Government of Australia employee. You have never applied for Australian residency, so have not advised the electoral office to remove your name from the electoral role. You have advised Medicare and/or your health insurance provider to have your name removed from their records.

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

Reasons for decision: Detailed Reasoning - Residency: 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 TR 98/17 Income Tax: residency status of individuals who enter Australia , and Taxation Ruling IT 2650 Income Tax: residency status of individuals who temporarily live outside Australia. Taxation Ruling TR 98/17 states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here. It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances. You are a citizen of country A and you were born in country A. You are not a permanent resident or citizen of any other country. You left Australia to take up a employment contract (with the possibility of extension) in country B. You have a multiple entry work visa which does not allow you to live in country B permanently. You live in a company apartment provided by your employer in country B. You are not physically present in Australia from a certain point onwards except for occasional business meetings with Australian based consultants. Based on the facts above you are not residing in Australia according to ordinary concepts from a certain point onwards. | Detailed Reasoning - The domicile test: If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. You were born in country A and you have not changed your domicile to Australia as you have not taken steps to become a permanent resident or citizen of Australia. Therefore you are not a resident of Australia under this test. | 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 will not be in Australia for more than 183 days from a certain point onwards. 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 have never been Commonwealth Government employees. You are not a resident under this test. | Detailed Reasoning - Your residency status: You are not a resident of Australia for taxation purposes from a certain point onwards.