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Edited version of private ruling

Authorisation Number: 1011584604421

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Ruling

Subject: Residency - Temporary Resident

1. Are you an Australian resident for income tax purposes?

Yes.

2. Are you a temporary resident of Australia for income tax purposes?

Yes.

This ruling applies for the following periods:

Year ended 30 June 2011.

Year ended 30 June 2012.

Year ended 30 June 2013.

Year ended 30 June 2014.

The scheme commenced on:

1 July 2006.

Relevant facts and circumstances

You are a citizen of Country A.

You and your spouse are holders of a specific visa which allows you the right to remain indefinitely in Australia and to work without restrictions as long as you remain a Country A citizen.

In a previous private ruling, you stated that you and your spouse were not in Australia on a specific day in 2001, or were outside Australia on that specific day in 2001, but present in Australia as a specific visa holder for at least one year in the two years prior to that date.

You are a beneficiary of various Country A trusts.

Some time early in the 2006-07 income year, you moved to Australia with your two youngest dependant children who are currently studying at school. You did not purchase a property; instead you have been renting out a property on a long term lease.

You are also a director of various Country A resident companies and a director of an Australian resident company - Company A.

In Australia, you are considering purchasing a vehicle and holding Australian bank accounts as well as taking on a paid job.

Your long term aim is to reside in Australia until your children finish high school and possibly university (at least until late 2010). However, beyond this, you are intending to significantly reduce your time in Australia.

Company A purchased a property which you and your spouse intend on renovating.

A child of you and your spouse has been named as a member of a specific Australian sports team. Accordingly, there is potential for this child becoming an Australian citizen. However, this child will not consider becoming an Australian resident until they are at least 18 years of age. Despite this child becoming legally independent at the age of 18 years, they may still be financially dependent on you and your spouse for some time further.

You and your spouse have no intention of becoming Australian citizens.

In a previous private ruling, you stated that your spouse will remain in Country A and continue to live in your home with your other children. They travel to Australia for one week every month, and longer for holiday trips in Australia. You return to Country A approximately once every quarter.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1).

Income Tax Assessment Act 1997 Section 995-1.

Reasons for decision

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). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are:

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. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.

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; 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'.

Taxation Ruling TR 98/17 considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

In your case, it is considered that you are an Australian resident for tax purposes under 'the resides test' for the following reasons:

Based on the information you have provided, it is considered that you are an Australian resident for income tax purposes from the date you entered Australia, as your behaviour in Australia reflects a degree of continuity, routine or habit that is consistent with residing here.

Temporary resident

A temporary resident as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) is a person:

The Migration Act 1958 provides that a temporary visa is a visa to travel to and remain in Australia:

Temporary visas are distinguished from permanent visas which allow a person to remain in Australia indefinitely.

Under the Social Security Act 1991, an Australian resident is a person who resides in Australia and is either an Australian citizen or holds a permanent resident visa. Country A citizens who hold a specific visa and were in Australia on a particular day in 2001, or were outside Australia on that particular day in 2001, but present in Australia as a specific visa holder for at least one year in the two years prior to that date, are also considered to be Australian residents for the purposes of the Social Security Act 1991.

In your case:

As you satisfy the conditions for a temporary resident as defined in subsection 995-1(1) of the ITAA 1997, you are considered to be a temporary resident of Australia for income tax purposes.

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