Private ruling: Residency
Date of advice: 13 October 2017
Published: March 2018
Ruling period: Year ended 30 June 201Y
Date scheme commenced: 1 July 201X

Ruling: Q1: Am I a resident of Australia for income tax purposes? | A1: Yes

Relevant facts and circumstances: You arrived in Australia on a 417 Working Holiday Visa in mid 201X. In early 201Y you were granted a Temporary Work (Skilled) (subclass 457) Visa. When your Visa expires in 202Z you will apply for permanent residency. You intention was always to make Australia your permanent residence. You do not own any property or assets outside Australia. You have rented accommodation with an ongoing 12 month lease agreement with your partner.

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 taxation 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 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. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. | Detailed Reasoning - Your residency status: Based on the facts provided we can conclude that when you arrived in Australia in mid 201X you were on a 417 working holiday visa, and your intention was to make Australia your home. In early 201Y you were granted a 457 Temporary Working Visa. When lodging your 201Y tax return you will select Yes to the residency question, and be taxed at the resident rate of 19% from 1 July 16 to 31 December 16, from 1 January 17 to 30 June 17 you will be taxed at the 15% rate as a working holiday maker. From 1 July 2017 you will select Yes to the residency question and be taxed as a resident until the end of your 457 Visa or stay in Australia.

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