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This edited version has been archived due to the length of time since original publication.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

Authorisation Number: 1012761503148

Ruling

Subject: Residency

Question and answer

Are you a resident of Australia for taxation purposes?

No.

This ruling applies for the following periods:

Year ended 30 June 2014

Year ended 30 June 2015

Year ended 30 June 2016

Year ended 30 June 2017

Year ended 30 June 2018

The scheme commenced on:

28 November 2013

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 are a citizen of Australia and country B, country B is your country of origin.

You are a permanent resident of Australia and are a resident of country B by birth right. Your family migrated to Australia when you were a child.

You departed Australia to go to country A to work.

You entered country A on a temporary visa for a few weeks until you obtained a permanent visa.

You left Australia to work and live abroad. You do not plan on returning to live in Australia permanently.

You plan to reside overseas permanently.

You formed the intention to make your home indefinitely outside Australia 3 months prior to your departure.

If you do return to Australia it will only be for short family visits (less than a month every 1-2 years).

You do not hold a return airline ticket.

You have returned to Australia once since your departure for a short holiday (20 days).

You are renting a house on a 2 year lease in country A.

Your employer provides you with locations in which you may rent at good rates, but you choose the location and pay rent monthly.

In country A you have a bank account, motor vehicle, and household effects.

Prior to leaving Australia you lived with relatives.

In Australia you have bank accounts and a super fund (which you are no longer contributing towards).

You sold and gifted your household effects in Australia.

You are not receiving income from Australian sources.

You commenced your employment when you arrived in country A.

You are a permanent employee.

Your spouse has left Australia permanently to live in country A with you in the house you are renting.

Your parents live in Australia and you are trying to relocate them as they are getting older and will require ongoing care.

In country A you have your employment and many friends.

You and your spouse have never been a Commonwealth Government of Australia employee.

You have not removed your name from the electoral roll but intend to.

You do not have any investments with Australian companies.

You have not advised Medicare or your health insurance provider that your name should be removed from their records as you were not aware that you needed to.

You stated that you were leaving Australia permanently on your Outgoing passenger card.

Relevant legislative provisions:

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

Income Tax Assessment Act 1936 Subsection 6(1).

Reasons for decision

Residency

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.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the:

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:

These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling TR 98/17 Income Tax: residency status of individuals who enter Australia, and Taxation Ruling IT 2650 Income Tax: residency status of individuals who temporarily live outside Australia.

Taxation Ruling TR 98/17 states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

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 country B, country B is your country of origin.

You are a permanent resident of Australia and are a resident of country B by birth right. Your family migrated to Australia before 1995.

You departed Australia to go to country A to work.

You entered country A on a temporary visa for a few weeks until you obtained a permanent visa.

You left Australia to work and live abroad. You do not plan on returning to live in Australia permanently.

You plan to reside overseas permanently.

You formed the intention to make your home indefinitely outside Australia some months prior to your departure.

If you do return to Australia it will only be for short family visits (less than a month every 1-2 years).

You do not hold a return airline ticket.

You have returned to Australia once since your departure for a short holiday.

You are renting a house on a multi-year lease in country A.

Your spouse has left Australia permanently to live in country A with you in the house you are renting.

Your parents live in Australia and you are trying to relocate them as they are getting older and will require ongoing care.

Based on the facts above you were not and will not be residing in Australia according to ordinary concepts for the 2014 to 2018 income years.

The domicile 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.

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.

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.

You do not have a permanent place to live in Australia and gave away your household effects.

In country A you have bank accounts, a car, and household effects.

You have signed a two year lease on a property in country A and your spouse lives there with you.

You are employed permanently in country A and you plan on staying there indefinitely.

Your visa allows you to live there permanently.

Based on these facts, the Commissioner is satisfied that you have established a permanent place of abode overseas.

In your case, you have moved to country A and your spouse has accompanied you. You have permanent employment there and intend relocating your parents there. You will only return to Australia on holiday.

Therefore, you are not a resident of Australia for tax purposes.

The 183-day test

Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia.

You will not be in Australia for more than 183 days.

You are not a resident under this test.

The superannuation test

An individual is still considered to be a resident if that person is eligible to contribute to the PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee.

You and your spouse have never been Commonwealth Government employees.

You are not a resident under this test.

Your residency status

You are not a resident of Australia for taxation purposes.

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