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This edited version has been archived due to the length of time since original publication.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

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Edited version of your written advice

Authorisation Number: 1012745056580

Ruling

Subject: Residency

Question and answer:

Are you a resident of Australia for income tax purposes?

Yes.

This ruling applies for the following periods:

Year ending 30 June 2011

Year ending 30 June 2012

Year ending 30 June 2013

Year ending 30 June 2014

The scheme commences on:

The scheme has commenced

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

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

You gained employment with an international entity.

You departed Australia to work in country R.

After a period you relocated to country S for employment purposes.

After a period you left country S and relocated to country V.

After a period you returned to country S for employment purposes.

While employed in the various overseas countries you work on rosters whereby you worked for a number of weeks followed by a number of weeks off.

While you were employed in each of the overseas countries you were provided with various short term accommodations with the provision of food.

Since your departure from Australia you have returned on a limited number of occasions for short periods.

Shortly after you departure from Australia you met your partner who is a country T national.

For a number of years after during the periods that you were off work you stayed with your partner in hotels and short term apartments for periods of no longer than 1 month.

After a number of years you leased an apartment in country T for an extended period.

After the leased expired you and your partner purchased an apartment in country T. Due to country T law, the title of the apartment could only be held in your partner's name. You list this as your residential address.

When you travelled to country T you entered the country on tourist visa's that allowed you to stay in country T for periods of up to a month.

You travel to country T under these visa's on numerous occasions over a number of years.

Your partner gave birth to your dependant who is a country T national.

You intend to marry your partner next year.

Your assets in Australia consist of a home that you and your sibling purchased. You continue to have a half share in this property as your sibling is unable to purchase the property outright. In addition, you have a number of Australian bank accounts that your overseas wages are deposited in and that you access from country T. All of your remaining assets including household goods and effects (including your motor vehicle) were given to your sibling.

Your overseas assets consist of a property that was purchased under your partner's name and household goods.

Your social and sporting ties in Australia consist of family and a handful of friends.

Your social and sporting ties in country T consisted of being a member of a gym, however this membership has expired.

Neither you nor your has been an employee of the Commonwealth Government of Australia.

Your name is not on the Australian electoral role.

You are in the process of notifying the Australian banks that you hold accounts with to change your status to being a non-resident.

You have no investments with any Australian companies.

You do not have any Australian private health insurance.

You formed the intension to make your home indefinitely outside of Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 995-1

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

Residency

An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).

The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the 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 first two tests are examined in detail in TAXATION RULING NO. IT 2650 INCOME TAX: Residency - Permanent Place Of Abode Outside Australia.

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 a resident of Australia for tax purposes if they satisfy the conditions of one of the other three tests.

The resides test

In FC of T v Miller (1946) 73 CLR 93 at page 99-100 and Subrahmanyam v FC Of T [2002] AATA 1298; 2002 ATC 2303; (2002) 51 ATR 1173 at paragraph 43-44, it was determined that the word 'resides' should be given the widest meaning.

Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia, identifies a number of factors which assist in determining the residency status of a taxpayer. Although Tax Ruling TR 98/17, discusses the Commissioners view on the residency status of individuals entering Australia, the same principles can be applied to determine whether individuals leaving Australia remained residents of Australia for income tax purposes.

According to paragraph 20 of TR 98/17 factors to be considered in determining residency in Australia are:

Paragraph 21 of TR 98/17 further states that:

Recent case law decisions have expanded on the list of factors identified in TR 98/17.  Case 5/2013 and Sneddon v FC of T (Sneddons Case), for example, considered the following factors in relation to whether the taxpayer resided in Australia:

From the information that you have provided you ceased to be a resident according to ordinary concepts from the date of your departure, therefore you are not a resident of Australia under the 'resides test'.

The domicile 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 generally their country of birth. This is known as a person's 'domicile of origin'. In order to show that an individual's domicile of choice has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country. In your case you were born in Australia, therefore your domicile of origin is Australia. From the information that you have provided you have not demonstrated any intention of becoming a citizen or permanent resident of country T or any of the countries that you were employed in, therefore your Australian domicile remains unchanged.

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 you intend to live for the rest your life.  An intention to return to Australia in the foreseeable future to live does not prevent you in the meantime setting up a permanent place of abode elsewhere.

Factors used in determining a taxpayer's permanent place of abode include:

• the intended and actual length of the taxpayer's stay in the overseas country;

• whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or return to Australia at some definite point in time;

• whether the taxpayer has established a home outside Australia;

• whether any residence or place of abode exists in Australia or has been abandoned because of overseas absence;

• the duration and continuity of the taxpayer's presence in the overseas country, and

• the durability of association that the person has with a particular place in Australia, that is, maintaining bank accounts in Australia.

In your case your movements are such that you do not stay in any one country including country T, for any lengthy period of time. For the most part you live in accommodation that is either provided by your employer or is temporary in nature. The visa's that you use to enter the various countries are supplied by your employer, or in the case of country T are tourist visa's that only allow you to stay for a short period. You do not have any banks accounts etc. in country T. You have maintained your Australian bank accounts that you have continued your overseas remuneration paid into and continue to own a part share in a property in Australia. In light of the above the Commissioner is not satisfied that you have established a permanent place of abode in any overseas country.

It is acknowledged that you have a partner and dependent living in country T and have purchased an apartment in country T under your partner's name. However this alone does not constitute the establishment of a permanent place of abode

As you have an Australia domicile and you have not established a permanent place of abode outside of Australia, you have remained a resident of Australia for income tax purposes under the 'domicile' test.

As you are a resident under the 'domicile test' there is need to consider the remaining 2 tests.

Accordingly, you are a resident of Australia under the 'domicile' test for the income years included in this ruling under subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997.

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