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Edited version of your private ruling
Authorisation Number: 1012618354675
Ruling
Subject: Residency
Question 1
Are you a resident of Australia for taxation purposes?
Answer
Yes
This ruling applies for the following period
Year ending 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts
You were born in Australia and you are a citizen of Australia.
You are a member of a religious organisation.
Your accommodation is provided by the organisation.
You participate in religious studies overseas.
You do not intend on living overseas on a permanent basis and always intend on returning to Australia to undertake your religious work.
Your organisation is able to place you in any country not necessarily your country of choice.
You do not currently receive any foreign or Australian source income however; you may receive a distribution from a trust in the future.
You have never been a Commonwealth Government employee.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Residency
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.
The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the:
• resides test;
• domicile and permanent place of abode test;
• 183 day test; and
• Commonwealth superannuation fund test.
The primary test for deciding the residency status of each individual is whether they reside in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.
The resides (ordinary concepts) test
The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word 'resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test.
Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides' test:
(i) Physical presence in Australia.
(ii) Nationality.
(iii) History of residence and movements.
(iv) Habits and 'mode of life'.
(v) Frequency, regularity and duration of visits to Australia.
(vi) Purpose of visits to or absences from Australia.
(vii) Family and business ties to different countries.
(viii) Maintenance of place of abode.
These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in IT 2650 and Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.
It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances.
You are a citizen of Australia and you were born in Australia.
You are a member of a religious order.
You participate in religious studies overseas.
You do not intend on living overseas on a permanent basis.
You study overseas and your order may send you to any country to carry out your religious work.
Your religious order provides your accommodation.
You do not receive any foreign or Australian source income.
You may receive a distribution from your parent's discretionary trust in the future.
In your case, although you intend to be physically absent from Australia, there are various factors that indicate that you have not ceased to be a resident of Australia. These are primarily:
• You are a citizen of Australia.
• You were born in Australia.
• You do not intend on living permanently overseas.
• Your religious order provides your accommodation overseas
Based on the above, you will retain a continuity of association with Australia while you are overseas and will be residing in Australia according to the ordinary meaning of the word.
Therefore, you are a resident of Australia under the 'resides' test of residency.
As you meet the resides test there is no need to consider the domicile, 183 day and superannuation tests.
Residency Status
You are a resident of Australia for taxation purposes for the period you are overseas.
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