Private ruling: Residency
Published: February 2012
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010
Date scheme commenced: 1 July 2008

Ruling: Question and answer: | Are you a resident of Australia for tax purposes? | Yes.

Relevant facts and circumstances: You left the Country X You were granted a X year, visa before leaving the Country X. Your spouse accompanied you to Australia. You commenced full time employment in Australia. You were sponsored by Z Ltd. Your permanent accommodation in the Country X was rented on a 12 month lease. It was your intention to live and work in Australia for a period of 4 years. Initially in Australia you rented an apartment for X month. You then rented a residential property for Y months. Finally you rented a residential property for Z months. You decided to return to the Country X after the birth of your child. You returned to the Country X.

Relevant legislative provisions: Section 6-5 of the Income Tax Assessment Act 1997 .

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. 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 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: · the resides test, · the domicile test, · the 183 day test, and · the superannuation test. The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they will still be considered to be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests. | Detailed Reasoning - The 'resides' test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 5 th 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'. You and your spouse were residing in the Australia as evidenced by: · renting a residential property, · residing with your spouse, · working full time, and · your intention to live in Australia for an extended period of time. · which only changed with the birth of your child. Therefore, you are considered to have been residing in Australia until you returned to the Country X. As you are a resident of Australia under the resides test, it is not necessary to consider whether you meet any of the three statutory tests. | Detailed Reasoning - Your residency status: For the time you lived in Australia, between the X until your departure on the X, you are considered to be a resident of Australia under the resides test, outlined in subsection 6(1) of the ITAA 1936.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.