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This edited version has been archived due to the length of time since original publication.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: 1012560064588

Ruling

Subject: Your residency status

Question 1

Are you a resident of Australia for taxation purposes from when you left Australia to migrate permanently to country X?

Answer

No.

Question 2

If you do not earn any income from any source in Australia after you left, are you required to lodge tax returns in Australia to declare your salary earnings from country X?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2011

Year ended 30 June 2012

Year ended 30 June 2013

Year ended 30 June 2014

Year ended 30 June 2015

Year ended 30 June 2016

Year ended 30 June 2017

The scheme commenced on:

Late December 20YY

Relevant facts and circumstances

You were born in Australia and you are a citizen of Australia.

You left Australia permanently in the 2010-11 financial year with your spouse to migrate to country X.

You entered country X on a specific visa, after taking a short holiday with your spouse to another country.

This visa allows you to stay in country X for a stipulated amount of years and it is extendable for a further term. After this you can apply for permanent residency and citizenship of country X.

You have subsequently swapped to a country X residence permit visa which confirms that you are not subject to any limitation of period of permitted stay in country X.

Since then you have lived permanently in country X and you have only travelled back to Australia once, briefly, as a holiday to see your family. You have made no other trips to Australia since.

You have no assets in, or other ties with Australia, other than your parents and a sibling who still live in Australia.

You have no place to live in Australia. You do not own any property; you have no investments and have no employment connected with Australia.

You work full-time on a permanent, non-time limited basis in country X. Your employer does not conduct any business in Australia.

You and your spouse rent a flat which is your permanent and only residence in country X and have done so for years. You have had two previous flats in country X.

Except one old savings account in Australia with a balance of less than A$100, all your bank accounts are in country X and your salary is deposited in that foreign account. You only maintain the Australian bank account to buy presents for your family and friends in Australia. That money is the full extent of your assets in Australia.

You have advised your bank, Medicare, your superannuation fund and the electoral roll that you have permanently moved overseas and that your membership should be cancelled or subject to non-resident withholding tax.

You own a car in country X and have a country X driver's licence.

Neither you nor your spouse have ever been Australian Commonwealth Government employees.

Your reason for going overseas when completing the Australian Immigration Outgoing passenger card was "permanent migration to country X".

You have filed a tax return and you have been assessed for your Australian income up to the date you departed Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 995-1(1)

Income Tax Assessment Act 1936 Section 6(1)

Reasons for decision

Residency Status

Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose of the Income Tax Assessment Act 1936 (ITAA 1936).

According to subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936), a person is a resident of Australia for tax purposes if they:

(d)  are a member of either the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation Scheme (PSS), or a spouse of child under 16 of such a person.

The primary test for deciding your residency status is whether you live in Australia according to the ordinary meaning of the word "resides".  Failing this primary test, your circumstances are examined in relation to the remaining three statutory tests.

Residence according to ordinary concepts
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'.

As you have been living and working in country X from when you departed Australia, you are not a resident of Australia for tax purposes under this test.

The domicile/permanent place of abode test
If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.

There are essentially 3 types of domicile that an individual can have:

Essentially, your domicile of origin is the where you were born and in order to show that you have chosen a new domicile of choice in a country outside Australia, you must be able prove an intention to make your home indefinitely in that country.

In relation to domicile of dependency, such a domicile will normally only exist in relation to minors or individuals who are of unsound mind.

You were born in Australia and you have not applied for permanent residency in country X. However, your visa allows you to stay in country X for a stipulated amount of years and is then extendable for a further period. After this you can apply for permanent residency and citizenship of country X.

Your parents and sibling remain living in Australia and as you have not yet applied for alternative permanent residency or changed your citizenship you have maintained your Australian domicile.

The final component of this test rests on the Commissioner being satisfied that you have established a permanent abode outside Australia.

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.

You have left Australia permanently and you are living and working in country X. You and your spouse have established a home in country X and you have provided documentation that evidences your living arrangements.

The Commissioner is satisfied that you have established a permanent abode outside Australia.

You are not a resident of Australia under this test.

The 183-day test
Where you are present in Australia for 183 days during the year of income you will be a resident, unless the Commissioner is satisfied that your usual place of abode is outside Australia and you do not intend to take up residence in Australia.

You were present in Australia for less than 183 days during the 2010-11 financial year. You lodged your tax return for that year prior to departing Australia and claimed a part-year tax free threshold.

This test is not applicable to your circumstances.

The superannuation test
You will still be a resident of Australia if you are eligible to contribute to the Commonwealth Superannuation Scheme (CSS) or Public Service Superannuation Scheme (PSS), or you are the spouse or child under 16 of such a person.

Neither you nor your spouse have ever been employees of the Commonwealth Government of Australia, therefore you are not a resident under this test.

Your residency status
For the reasons outlined above you are not a resident of Australia for tax purposes under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 from when you departed Australia.

You have lodged a tax return and been assessed on your Australian income before you departed Australia permanently.

You are not required to lodge further tax returns in Australia as you are no longer deriving any Australian sourced income, and you have notified your Australian financial institutions of your overseas address.

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).