Private ruling: Residency
Published: March 2013
Ruling period: Year ended 30 June 2011 | Year ended 30 June 2010 | Year ended 30 June 2009 | Year ended 30 June 2008
Date scheme commenced: 1 July 2007

Ruling: Question and answer | Were you a resident of Australia for taxation purposes? | No.

Relevant facts and circumstances: You are a citizen of both Australia and an overseas country. You were born overseas. You arrived in Australia a number of years ago. You left Australia a few years back to live and work in an overseas country. You had a work contract for a number of years and had the option to extend that contract. Your spouse accompanied you overseas after they arranged transport of your furniture and pets. Your motor vehicles were sold in Australia prior to leaving for overseas. Your family home and rental properties were rented out. You had an Australian bank account to accept the rent and pay expenses associated with the rental properties. You lived in the same rental property overseas for the duration of your stay. You paid tax on your overseas income in the overseas country and had a bank account overseas. You returned to Australia for short periods. You were not in Australia for more than 183 days in any financial year while you were overseas. You had a visit from a family member. You intended to live and work in the overseas country on a permanent basis. Neither you nor your spouse are currently or have ever been Commonwealth Government employees.

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

Reasons for decision: Summary: 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 · 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'. You left Australia to live and work on a permanent basis. You were accompanied by your spouse overseas. You lived in the one rental property for the duration of your stay overseas. You only returned to Australia for short periods. It is considered you were not residing in Australia according to ordinary concepts as you were not living and working in Australia. | 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. Your domicile of origin is another overseas country. Your domicile of choice is Australia. 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. You left Australia to live and work in an overseas country. You intended to live and work overseas for an indefinite period as your work contract was for a number of years with an option to extend the contract. You lived in the same rental property for the whole of your stay overseas. Your spouse accompanied you overseas. You transported your furniture and pets overseas. Based on these facts, it is therefore considered that you established a permanent place of abode overseas for the period. | Detailed Reasoning - The 183-day test: When a person is present in Australia for 183 days or more 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. This test does not apply as you were not in Australia for 183 days or more during any year of income for the period you were overseas. | 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. Only current and former Commonwealth Government employees are eligible to contribute to the PSS and CSS. As you and your spouse were not Commonwealth Government of Australia employees at any time you will not be treated as a resident under this test. | Detailed Reasoning - Your residency status: You were not a resident for tax purposes under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 for the period you were overseas. Therefore, you were not considered to be an Australian resident for the period you were overseas.