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Edited version of your private ruling
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Ruling
Subject: Residency for tax purposes
Question and answer
Were you a resident of Australia for tax purposes during the relevant periods?
Yes.
This ruling applies for the following periods:
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on:
1 July 2010
Relevant facts and circumstances
In the year ended 30 June 20XX, you relocated overseas from Australia.
You were employed by a Commonwealth government department in the income years ended 30 June 20YY and 30 June 20ZZ.
You were a member of the Public Sector Superannuation Scheme (PSS) in the income years ended 30 June 20YY and 30 June 20ZZ.
You were on leave without pay during part of both the income years ended 30 June 20YY and 30 June 20ZZ.
You did not contribute to the PSS while you were on leave without pay.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that 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 in subsection 6(1) of the Income Tax Assessment Act 1936 (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 resides test,
· the domicile test,
· the 183 day test, and
· the superannuation test.
The superannuation test
A person will be considered a resident under the Commonwealth superannuation fund test if they are:
· a member of the superannuation scheme established by deed under the Superannuation Act 1990; or
· and eligible employee for the purposes of the Superannuation Act 1976; or
· the spouse, or a child under 16, of a person covered by the above.
The PSS is governed by the Superannuation Act 1990. Part 3 of this Act sets out provisions governing membership of the PSS Scheme. As per section 6(1)(a) of the Superannuation Act 1990, a "permanent employee" is a member of the scheme. The meaning of "permanent employee" is set out in section 3;
permanent employee means a person employed in a permanent capacity by the Commonwealth or by an approved authority, but does not include a person who is engaged or appointed for employment outside Australia only, not being a person who is included in a class of persons approved by the Minister, in writing, for the purposes of this definition.
In your case, you were employed by a Commonwealth government department and a member of the PSS throughout the income years ended 30 June 20YY and 30 June 20ZZ. You were on leave without pay for part of this period.
Although you did not contribute to the PSS while you were on leave without pay, you were still a member of the PSS as you were still a permanent employee as a result of your employment with the Commonwealth government.
Therefore, you satisfy the superannuation test and are an Australian resident for tax purposes.
Your residency status
As you meet the superannuation test, you are a resident of Australia for tax purposes. It is therefore not necessary to consider whether you meet the resides test, the domicile test or the 183 day test.
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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