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Edited version of private ruling

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Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2013

Year ended 30 June 2012

Year ended 30 June 2011

Year ended 30 June 2010

The scheme commenced on

1 July 2009

The scheme that is the subject of this ruling

You are a citizen of Australia.

You were born in Australia.

You moved overseas some years ago for work.

You moved to country A and have now moved to country B.

You do not intend to come back to Australia during your work career.

You may not return to Australia to live.

Neither you or your wife are currently or have ever been Commonwealth government employees.

Relevant legislative provisions

Income Tax Assessment Act 1936 6(1).

Explanation : (This does not form part of the ruling)

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 an Australian resident for tax purposes if they satisfy the conditions of one of the three other 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; 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'.

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.

In your case, you left Australia in some years ago. As you have not been living in Australia, you are therefore not considered to be residing in Australia according to ordinary concepts.

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 a new domicile of choice in a country outside Australia has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country.

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, based on the following information:

Based on these facts, it is considered that you have established a permanent place of abode outside Australia. Consequently, you do not satisfy the domicile test.

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 intend to return to Australia in the near future.

You are not a resident under this test.

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.

Neither you or your wife are or have been Commonwealth government employees.

You are not a resident under this test.

Your residency status

You are a non-resident of Australia for taxation purposes.

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