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Edited version of private ruling

Authorisation Number: 1011500500351

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Ruling

Subject: Residency

Question and answers:

Are you a resident of Australia for tax purposes?

Yes.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

You were born overseas and moved to Australia.

You are not a citizen of Australia and hold an overseas passport.

You are unable to obtain an Australian passport.

After a period of time living in Australia, you and your family moved to overseas for a short work assignment. Once the assignment was completed you returned to Australia.

After a period of living in Australia you gained another employment assignment overseas, and in doing so obtained an overseas residents visa with an accompanying work permit in the country that you were contracted to.

You and your spouse moved overseas, where you lived and worked. Your children did not accompany you as they have all left home.

Your intentions were to reside overseas and return to Australia once your employment contract was complete.

While in the overseas country you acquired a driver's licence and lived in housing provided by your employer.

After a time your spouse returned to Australia to reside permanently, however you continued to live and work overseas.

When your spouse returned to Australia you changed your roster so in your time off you could return to Australia to be with your spouse.

In the current financial year you have returned to Australia on a number of occasions.

You have the following overseas assets:

You have the following assets in Australia:

You have a number of overseas social and sporting ties.

You have no social or sporting ties in Australia.

You or your spouse have never been a Commonwealth Government of Australia employee.

You have returned to live in Australia permanently during the financial year.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Income Tax Assessment Act 1997 Section 995-1

Reasons for decision

An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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. These tests are:

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 satisfy the conditions of one of the other three tests.

The resides test

The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; have 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'.

As you have resided and worked overseas from a date several years ago to a date in this financial year, you are not considered to be residing in Australia under the 'resides' test from 1 July 20XX to a date in this financial year. From a date in this financial year, you returned to live in Australia permanently so are considered to be residing in Australia and a resident for tax purposes under the resides test from this date.

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.

In order to show that an individual's domicile of choice has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country.

In your case as you are a citizen of an overseas country who has lived in Australia for a considerable number of years, with the exception of some overseas work assignments, it is considered your domicile is in 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 their 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.

Based on these facts, it is therefore considered that you do have an established permanent place of abode inside Australia. As it is considered that your domicile is in Australia, but you have not satisfied the Commissioner that you have a permanent place of abode outside of Australia you are considered to be a resident of Australia for tax purposes under this test.

The 183-day test and superannuation test

As you are deemed to be a resident of Australia under other tests outlined in subsection 6(1) of the ITAA 1936, there is no need to examine the remaining tests.

Your residency status

As you are considered to be a resident of Australia under the resides test (after a date in the financial year) and under the domicile test (for all of the year) as outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997, you are considered to be an Australian resident for taxation purposes for the 2009-10 financial year.

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