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Ruling
Subject: Residency for tax purposes
Question and answer
Are you a resident of Australia for tax purposes?
Yes.
This ruling applies for the following periods:
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on:
1 July 2009
Relevant facts and circumstances
You migrated to Australia several years ago.
You accepted an offer to work overseas.
Your spouse and children live in Australia. You support your family and visit them regularly.
Your spouse has become an Australian citizen.
You earn interest income in Australia.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Generally where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.
The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions which provide four tests to ascertain the residency status.
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 a resident of Australia for tax purposes if they meet the conditions of one of the other three tests.
The resides test
Taxation Ruling TR 98/17 Income Tax: residency status of individuals entering Australia emphasises the quality and character of an individual's behaviour while in Australia assists in determining whether the individual resides here.
All the facts and circumstances that describe an individual's behaviour in Australia are relevant. In particular, the following factors are useful in describing the quality and character of an individual's behaviour:
· intention or purpose of presence
· family and business/employment ties
· maintenance and location of assets, and
· social and living arrangements.
No single factor is necessarily decisive and many are interrelated. The weight given to each factor varies depending on individual circumstances.
In your case, you migrated to Australia several years ago. Your spouse and children live in Australia. Your spouse has become an Australian citizen. You work overseas, however, you support your family in Australia and return to Australia regularly.
Although you spend a great deal of your time overseas, you are there only for work purposes, and you return home to Australia to be with your family when you can.
Based on these facts, you are residing in Australia according to the ordinary meaning of the word. Therefore, you meet the 'resides test' and are a resident of Australia for tax purposes.
As you meet the 'resides test', it is not necessary to consider whether you are a resident under any of the three statutory tests.
Your residency status
You are a resident of Australia for tax purposes. As you are a resident of Australia, according to section 6-5 of the ITAA 1997, your assessable income includes income gained from all sources, whether in or out of Australia.
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