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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012136639446

Ruling

Subject: Residency for tax purposes

Question and answer

Were you a resident of Australia for taxation purposes from when you arrived in Australia to you left?

Yes.

This ruling applies for the following periods:

Year ended 30 June 2005

Year ended 30 June 2006

Year ended 30 June 2007

Year ended 30 June 2008

Year ended 30 June 2009

Year ended 30 June 2010

Year ended 30 June 2011

Year ending 30 June 2012

The scheme commenced on:

1 July 2004

Relevant facts and circumstances

You were born in country x and are a citizen of country x , Australia and country y.

You arrived in Australia a number of years ago.

You came to Australia for work purposes.

You intended to be in Australia for a couple of years and you stayed longer.

You purchased a home in Australia soon after arriving.

This was an economic decision.

You have properties in country x which were not rented out while you were in Australia.

You intended to return to country x after you left Australia.

Your spouse accompanied you to Australia.

You have immediate family in Australia, country x and country y.

While in Australia you travelled back to country x on a regular basis.

Both you and your spouse maintained all your medical and dental practitioners in country x.

You and your spouse did not undertake any regular medical and dental services in Australia.

You returned to your residence in country x each time you went back home.

You sold your residence in Australia.

When you left Australia you intended to go to country y to live.

Neither you nor your spouse has ever been commonwealth government employees.

Relevant legislative provisions:

Income Tax Assessment Act 1936 Subsection 6(1).

Income tax Assessment Act 1997 Section 6-5.

Income Tax Assessment Act 1997 Subsection 995-1(1).

Reasons for decision

Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose 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 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. 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'.

You arrived in Australia a number of years ago.

Your spouse accompanied you to Australia to live.

You purchased a home in Australia shortly after arriving.

You went back to country x for short periods to attend medical appointments.

You were living in Australia for more than xx years and had purchased a home to live in while you were here.

Your behaviour is consistent with someone who is residing in Australia.

You were residing in Australia according to ordinary concepts.

You are a resident under this test.

The domicile test

If a person has 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 Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely 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 his or her life. An intention to return to another country in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode in Australia.

In your case your domicile of origin is country x as you were born there.

You came to Australia and became an Australian citizen, therefore your domicile of choice is Australia.

You lived in Australia for more than xx years.

You purchased a home in Australia.

Your spouse accompanied you to Australia.

You have immediate family members living in Australia.

You returned to country x on a regular basis.

The Commissioner is not satisfied that your permanent place of abode is in country x. The fact that you purchased a home and was in Australia for more than xx years with your spouse accompanying you to Australia indicates that your domicile of choice is Australia and you have a permanent place of abode in Australia.

You are a resident under this test.

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.

For each financial year you were in Australia you were here for more than 183 days.

The Commissioner considers xx years to be a considerable amount of time to be in Australia and is satisfied that your usual place of abode is not country x but Australia.

You are 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.

This test does not apply to you.

Your residency status

You were a resident of Australia for taxation purposes from the time you arrived until you left Australia.

You are required to declare all your income both in and out of Australia in an Australian tax return.

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