Private ruling: Residency
Date of advice: 25 October 2017
Published: March 2018
Ruling period: Year ended 30 June 2016 | Year ended 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: DDMMYY

Ruling: Questions and answers: | 1. Are you a resident of Australia for taxation purposes? | No | 2. Will you be a resident of Australia for taxation purposes from the time you return to Australia? | Yes

Relevant facts and circumstances: You are a duel Country Y and Australian citizen. You and your family went to Country Z in the 2016 income year You had a work contract in Country Z for 3 years. Your children were enrolled in school in Country Z. It was your intention to remain in Country Z for the duration of your employment in Country Z. You rented accommodation in country Z. You rented out your home in Australia. You sold your motor vehicles in Australia. You suspended your Australian health insurance. You took household items and personal items to Country Z with you. You purchased furniture and other household items in Country Z. You purchased a car in Country Z. You hired domestic help in Country Z. You have not returned to Australia since leaving in the 2016 income year. You entered into two year contracts for mobile phone services, internet and television services in Country Z. Your employment in Country Z has been made redundant and you will cease your employment in country Z in the 2018 income year and you will return to Australia in the 2018 income year. Neither you nor your spouse are eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

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

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. 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 from the time you left Australia until you return to Australia.

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