Private ruling: Residency
Published: June 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you a resident of Australia for tax purposes? Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1936 subsection 6(1) | International Tax Agreements Act 1953 schedule 5

Reasons for decision: Detailed Reasoning - Residency: 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) and section 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). 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 · the superannuation test. The first two tests are examined in detail in Taxation Ruling IT 2650. 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 may 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. 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'. We consider you will not be residing in Australia as evidenced by: · staying with your parents in country A as a home base while you holiday in country A · you do not intend returning to Australia permanently until 2017 · you intend to travelling around foreign countries before returning to Australia. · your spouse has accompanied you, and · you have rented out your apartment in Australia until you return. As you are not residing in Australia you will not be a resident of Australia under this test. | Detailed Reasoning - The domicile test: If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. A person's domicile of origin will not usually change, but can in some circumstances. For example, a person can acquire a domicile in another country by choice. In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country. You have not applied for country A citizenship although you may at some time in the future. You are an Australian citizen. Your spouse's assets will remain here and you have strong social and family connections here, therefore, we consider your domicile is unchanged. The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives. A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere. In your case you are going to country A with the intention of making it your base for further travel. You will stay with family there. Then you will travel around foreign countries before coming back to Australia. You will live in the currently rented apartment at the end of your travels. In your case the Commissioner is not satisfied that you will have a permanent place of abode outside Australia. So you are a resident under this test | Detailed Reasoning - The 183-day test: Under the 183 day test you are considered a resident of Australia if you are present in Australia for a total period of more than half of the year of income, that is 183 days, unless the Commissioner is satisfied that your usual place of abode is outside Australia and you do not intend to take up residence in Australia. This test does not apply to as you will not be in Australia for over 183 days in any year during your absence. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. You will not be treated as a resident under this test as you are not a member of the PSS or the CSS, a spouse of such a person, or a child under 16 of such a person. | Detailed Reasoning - Your residency status: You are a resident of Australia under the domicile test.

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. | Relevant facts: You are a citizen of Australia and Australia is your country of origin. | You depart Australia in mid 2012. | You are travelling to country A on a multiple entry tourist visa. | You intend spending about 1 year based in an area of country A travelling overland then flying to foreign country and spending the remaining time travelling back to Australia. | Your intention in regard to residency is to return to Australia permanently in mid 2017. | You will return to Australia occasionally to visit family and friends. | While in country A you will be basing yourself at your parents' house. You will stay there for a short period from the date you arrive then will live there a few days per month for less than a year. | You may apply for country A citizenship as you are now eligible. | In mid 2013 you will travel from country A to foreign country where you will tour around until early 2015. You are not sure which countries you will be in or where you will stay, but will generally be in temporary accommodation. | From early 2015 you will be making your way home to Australia. | Your assets in country A include transferred funds to fund the purchase of an asset, travel expenses, and possibly some shares and/or an investment property. | In Australia your spouse owns an apartment which you have not lived in for the last couple of years. You have lived with relatives during this time. | The apartment is rented out, but you hope to return to live in the apartment when you return to Australia. You would be able to return to live with your spouse's parents at short notice if necessary. | Your assets in Australia include a small amount of cash in the bank. | You do not have an employment contract, but may do some short term work if the opportunity arises. | You hope to work in country A during your first year. | Your spouse is accompanying you on the trip. | Your social and sporting connections in Australia include and extended family network and a support network of friends. | Your social and sporting connections in country A include immediate family who live in country A. | Your spouse was a Commonwealth government of Australia employee for a short time. | You and your spouse do not currently hold a position with the Commonwealth Government of Australia. | You are over 16 years of age.