Disclaimer
This edited version has been archived due to the length of time since original publication.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: 1012145312136

Ruling

Subject: Residency

Question and answer:

Are you a resident of Australia for taxation purposes?

No.

This ruling applies for the following period:

1 July 2011 until 30 June 2015.

The scheme commenced on:

1 July 2011.

Relevant facts and circumstances:

You were born in Australia and you are an Australian citizen.

You have been working overseas since 2008.

You have a work visa which is in the country you work in.

You work 28 days on and 28 days off and spend the majority of your time off in the country you work in.

You have a home in the country you work in (your overseas residence) which you share with your partner and their child when you are not working on the oil rig.

Your personal belongings are located at your overseas residence.

You have strong family, social and sporting ties in the country you live in.

You have no plans to return to live in Australia.

Your intention is to continue working overseas and retire in the country you are living in.

Your assets in Australia include:

None of your family members accompanied you overseas.

You will spend less than 183 days in Australia in each financial year between the period 1 July 2011 and 30 June 2015.

You are over the age of 16.

You are not a member of the Public Sector Superannuation Scheme (PSS) or an eligible employee for the purposes of the Commonwealth Superannuation Scheme (CSS).

You do not have a spouse who is a member of the PSS or is an eligible employee for the purposes of the CSS.

Relevant legislative provisions:

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

Income Tax Assessment Act 1936 subsection 6(1).

Reasons for decision

Residency for taxation purposes - general

Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as 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:

If any one of these tests is met, an individual will be a resident of Australia for taxation purposes.

The resides test is the primary test for determining the residency status of an individual. If residency is established under the resides test, the remaining three tests do not need to be considered.

If residency is not established under the resides test, an individual will still be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests.

The resides test

The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'.

The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01 defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.

Taxation Ruling IT 2650 Income Tax: residency - permanent place of abode outside Australia specifies that a person's place of abode is where they live.

In your case, you left Australia in 2008 to live and work in another country. You work on a 28 day on/28 day off roster and when you are not working you live in the other country with your partner. You are not residing in Australia according to the ordinary meaning of the word 'reside'. Accordingly, you are not a resident of Australia for taxation purposes under the resides test.

The domicile and permanent place of abode test

Under this test, a person whose domicile is in Australia will be considered a resident of Australia for taxation purposes, unless the Commissioner is satisfied the person's permanent place of abode is outside Australia.

A person's domicile is generally their country of birth. This is known as a person's domicile of origin. A person's domicile of origin will not usually change but can in some circumstances. For example, a person can acquire a domicile in another country by choice.

In order to acquire a new domicile by choice outside of their domicile of origin, a person must have an intention to make their home indefinitely in a country outside their domicile of origin.

You have stated that you have no intention of returning permanently to Australia. Instead, you have stated that you intend to continue living and working in the other country until you retire and that you will remain in the other country after you retire. Accordingly, although your domicile of origin is Australia, we consider that you have obtained a new domicile of choice in the other country because of your stated intention to remain there.

As a result, it is not necessary to consider where your permanent place of abode is under this test and based on the facts in this ruling, you will not be a resident of Australia for taxation purposes under this test.

The 183-day test

Where a person is present in Australia for 183 days during an income year, the person will be a resident of Australia for taxation purposes 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 have stated that you will spend less than 183 days in Australia in each financial year between the period 1 July 2011 until 30 June 2015. Based on that fact, you will not be a resident of Australia for taxation purposes during that period of time under this test.

The superannuation test

Under this test, an individual will be considered a resident of Australia for taxation purposes if:

In your case, you are over the age of 16, and you are not a member of the PSS or an eligible employee for the purposes of the CSS.

You do not have a spouse who is a member of the PSS or an eligible employee for the purposes of the CSS.

Accordingly, you are not a resident of Australia for taxation purposes under this test.

Conclusion - your residency status

Based on the facts in this ruling, you will not be a resident of Australia for taxation purposes for the period 1 July 2011 to 30 June 2012.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).