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This edited version has been archived due to the length of time since original publication.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: 1012408069238

Ruling

Subject: Residency

Question and answer:

1. Are you a resident of Australia for taxation purposes from July 2012 until the 30 June 2014?

Yes.

This ruling applies for the following periods:

Year ended 30 June 2013.

Year ended 30 June 2014.

Year ended 30 June 2015.

The scheme commenced on:

1 July 2012.

Relevant facts:

You are an Australian citizen and your country of origin is Australia.

You are employed overseas.

You have a short term working visa for overseas, renewed on a regular basis.

You are working and residing overseas.

You have personal possessions and sporting equipment overseas but no other assets such as property.

You own shares.

You have several Australian bank accounts.

You do not have children or a spouse.

You have not retained any sporting or social connections with Australia.

You do not have time or opportunity for sporting connections overseas.

All overseas local taxes for which you would normally be liable as result of providing services under your work contract shall be paid by your company.

You have registered as an overseas elector.

You have arranged for a personal assistant to use and pay for your motor vehicle whilst you are overseas, they will also collect your mail such as council rates and alert you when these amounts become due. The reason for keeping an Australian address is due to the unreliable nature of postal services overseas.

You have arranged a property manager to look after the maintenance and rental of your property whilst overseas.

You have advised those involved with you share ownership that you are non resident until further notice.

You have rented out your house (fully furnished).

You have not resided in Australia since 2012.

Your contract lasts for a short term period but is renewable.

You have every intention of residing overseas for the foreseeable future as the work is to continue.

You intend to return to Australia in 2015 after the projects are completed (thus this is why you have retained your assets/possessions in Australia).

You receive accommodation as part of your payment package.

You live mainly out at the work site but you are also required to work in the office and you stay at the company provided apartment when you are there.

You have a designated room with an ensuite bathroom in a container style accommodation.

You eat meals in a mess so you do not have personal use of a kitchen.

You returned to Australia for a short holiday in 2012, to check on property and to collect personal effects.

Other than your sport equipment, clothes and footwear, you have bought towels and linen with you.

You are not a member of the PSS or the CSS, a spouse of such a person, or a child under 16 of such a person.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 6-5.

Income Tax Assessment Act 1936 Subsection 6(1).

Superannuation Act 1990.

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 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 will 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

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'.

In your case you have:

We do not consider that you are residing overseas, you are living in temporary accommodation while employed on short term contracts. You have not demonstrated that you are residing outside Australia. Therefore you are a resident under the resides test.

The domicile test and permanent place of abode test

If a person is considered to have 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.

A person's domicile is established at birth when they acquire a domicile of origin, being the country of their father's permanent home. The domicile of origin is retained until such time as a domicile is established by choice or by operation of law in another country.

In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country. A domicile may be changed by operation of law for example where a person has obtained a migration visa.

You have not indicated a permanent intention to change your domicile from Australia by legal means or otherwise, you have firm intentions to return to Australia where you retain citizenship.

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 Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.

In your case:

The Commissioner is not satisfied that you have established a permanent place of abode overseas.

Therefore you are a resident under the Domicile test.

The 183-day test

You are not a resident under this test as you will not be physically present in Australia for more than 183 days in any of the income years during your absence from Australia.

The superannuation test

A taxpayer will be considered to be a resident of Australia if they are a 'member' of the superannuation scheme established by deed under the Superannuation Act 1990. The Public Service Superannuation Scheme (PSS) was a superannuation scheme established by deed under the Superannuation Act 1990.

A 'member' is a person who is a member of the PSS. Generally this would include a permanent or temporary employee of the Australian Public Service (APS). A taxpayer no longer employed by the APS is considered a 'former member' and thus has ceased to be a 'member' of the superannuation scheme for the purposes of the definition of 'resident'.

You are not a member of the PSS or the CSS, a spouse of such a person, or a child under 16 of such a person.

Your residency status

You remain a resident of Australia under the Resides test and the Domicile test during your absence.

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