Private ruling: Residency
Published: June 2012
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 30 June 2011

Ruling: Question and answer: | Are you a resident of Australia for taxation purposes from when you left Australia? | No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You left Australia to undertake employment in Country X. Your immediate family went with you to Country X. You intend to continue your employment in Country X indefinitely. You are likely to stay in Country X indefinitely. You own a small number of Australian properties which you purchased to live in whilst you were in Australia, these are all now rented out. Other than your properties you have no other assets in Australia. You have established a permanent place of abode in Country X. Neither you nor your spouse has ever been an Australian Government employee.

Relevant legislative provisions: Subsection 6(1) of the Income Tax Assessment Act 1936 | Section 6-5 of the Income Tax Assessment Act 1997

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are an Australian resident for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a non resident of Australia for taxation purposes, your assessable income includes only income from an Australian source. | Detailed Reasoning - Are you an Australian resident for tax purposes?: 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 an Australian resident for income tax purposes. These tests are: 1. The resides test 2. The domicile test 3. The 183 day test 4. 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 an Australian resident for tax purposes if they satisfy the conditions of one of the three other tests. | Detailed Reasoning - 1. The resides test: The ordinary meaning of the word reside, according to the dictionary definition, 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. As you are residing outside of Australia and have no set plans to return to Australia permanently in the near future, you are not residing in Australia. | Detailed Reasoning - 2. 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. | Detailed Reasoning - Domicile: Generally speaking, persons leaving Australia temporarily would be considered to have maintained their Australian domicile unless it is established that they have acquired a different domicile of choice by operation of law. In order to show that a new domicile of choice in a country outside of Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country. In your case, you have advised that you intend to remain in Country X and work indefinitely, but wish to retain your Australian domicile. Therefore, you have maintained your Australian domicile. | Detailed Reasoning - Permanent place of abode: 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. Taxation Ruling IT 2650 outlines the elements to be considered when determining whether a person has established a permanent place of abode outside of Australia. The ruling states that all of the circumstances of each case need to be considered and not one factor is determinative. Factors to be considered include: 1. Intended and actual stay overseas 2. Intention to stay in one country or move between countries 3. Whether a home has been established outside of Australia 4. The duration and continuity of presence overseas 5. The durability of association with Australia Although you maintain economic ties with Australia through your rental properties, you have established your life in Country X through your long term employment contract, social networks and involvement in sporting groups; therefore you have established a permanent place of abode in Country X. You are not a resident of Australia under the domicile test. | Detailed Reasoning - The 183 day test: When a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You do not satisfy this test as you will have not spent 183 in Australia in any financial year covered by this ruling. | 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 are not a member of the PSS or CSS or a spouse of such a person, or a child under 16 of such a person as nor you or your spouse have ever been employed by the Commonwealth of Australia. Therefore, you will not be treated as a resident under this test. | Detailed Reasoning - Your resident status: You are not a resident under any of the residency test from the day you left Australia. Therefore you are not a resident of Australia for tax purposes.

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.