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This edited version has been archived due to the length of time since original publication.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: 1012243403887

Ruling

Subject: Residency for tax purposes

Question and answer

Were you a resident of Australia for taxation purposes for the period you were overseas?

No.

Is the income you earned overseas assessable in Australia?

No.

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

The scheme commenced on:

1 July 2009

Relevant facts and circumstances

You were born overseas.

You are a citizen of Australia.

You left to work and live overseas a number of years ago.

You had a work visa to work overseas.

You went overseas to live and work.

You had long term plans to live and work overseas.

The work you were involved in allowed for long visa renewals.

You had a work contract which could be extended.

Due to a natural disaster overseas you returned earlier than planned.

You lived in rented accommodation overseas.

Your family accompanied you overseas.

You had no assets overseas and only held one bank account.

You had a home in Australia which was rented out while you were overseas and an investment fund along with a bank account.

You had no social or sporting connections with the overseas country.

You had no social or sporting connections with Australia.

Neither you nor your spouse has ever been a Commonwealth Government employee.

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

To understand your tax situation, you must first work out whether you are an Australian resident for tax purposes. Australian residents are generally taxed on their worldwide income and non-residents are generally taxed only on their Australian-sourced income.

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

You do not meet any of the above tests and are not considered a resident of Australia for tax purposes from when you left Australia.

You left to work overseas with the long term plan and intention to live and work there for a number of years.

Your family accompanied you overseas.

You rented out your home in Australia for the duration of your stay overseas and you rented accommodation overseas.

The only reason you returned to Australia was due to natural disaster.

The factsheet Residency - what you need to know provides details of the above residency tests and may be obtained from our website www.ato.gov.au.

As you were not a resident of Australia for tax purposes while you were overseas, your assessable income in Australia for that period only includes income sourced in Australia. The salary you earned overseas is therefore not assessable in Australia.

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