Private ruling: Residency
Date of advice: 7 November 2017
Published: April 2018
Ruling period: Year ended 30 June 2007 | Year ended 30 June 2008 | Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2006

Ruling: Q1: Were you a resident of Australia for taxation purposes from the date of your permanent departure from Australia until you returned to live permanently in Australia? | A1: No

Relevant facts and circumstances: You were born in Australia. You were a citizen of Australia. You left Australia with your spouse to live and work in Country A for an employer under an employment agreement that was for an initial 3 years and then indefinitely thereafter until terminated by either party. Your X adult children remained in Australia. In the same year, you and your spouse sold the property that had been your family home in Australia and no other place of abode was available to you in Australia during the time that you resided outside Australia. Your spouse relocated to a different country to work for the same employer. You and your spouse divorced. You remarried. You and your spouse left Country A to work for the same employer in Country B. Your employment terminated and you formed a company in Country B to undertake consultancy work. You and your spouse relocated to Australia due to limited business and work opportunities in Singapore. Since you first departed Australia you have returned for a number of short periods. You and your spouses resided in accommodation provided by your employer whilst living in Country A and B up to the termination of your employment, after which you rented accommodation in Country B. You did not derive Australian source income during the time that you resided outside Australia. You did not have any employment position being held for you in Australia. You did not pay private insurance premiums whilst overseas as you were covered under health plan of your employer. You maintained a bank account; your superannuation and shares in Australia. You and your spouse were not eligible to contribute to the PSS or the CSS and were not and had not been a Commonwealth Government employee.

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 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. Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency. Accordingly you were 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.