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This edited version has been archived due to the length of time since original publication.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: 1012803653870

Subject: Residency

Questions and answers

Are you a resident of Australia for tax purposes when you arrived here?

Yes

This ruling applies for the following period

Year ended 30 June 2008

Year ended 30 June 2009

Year ended 30 June 2010

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.

The scheme commenced on

26 June 2007

Relevant facts

You arrived in Australia on a temporary Australia visa.

You obtained a Temporary Partner Visa.

This led on to a Permanent Residency Visa.

You are an Australian citizen.

Your country of origin is Country A.

You originally came to Australia to spend some time here and to determine if you wanted to reside here on a more permanent basis.

You have left Australia for short holiday periods.

You live in Australia.

You have bank accounts and a house in Australia. You also own an investment property in Australia.

You have a bank account in Country A.

You do not have a permanent residence in Country A.

You have a permanent full time job in Australia.

You do not pay tax in any other country.

You have an active social life in Australia.

You keep in contact with your friends overseas.

Your spouse is a citizen of Country B.

Relevant legislative provisions

Section 6-5 Income Tax Assessment Act 1997.

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

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 may still be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests.

The resides test

The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'.

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 considering the definition of 'reside', the courts have stated that the word 'reside' should be given the widest meaning.

The question of whether an individual 'resides' in a particular country is a question of fact and degree and not of law. In deciding this question, the courts have consistently referred to and taken into account the following factors as being relevant:

It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances.

(i) Physical presence in Australia

A person does not necessarily cease to be a resident because he or she is physically absent from Australia.

In Koitaki Para Rubber Estates Limited v Commissioner of Taxation [1941] HCA 13; 64 CLR 241, Williams J stated (at 64 CLR 241 at 249):

You have been living and working in Australia for some time.

(iii) History of residence and movements

You have Australian Citizenship and are working full time in Australia. .

(iv) Habits and "mode of life"

You are working in Australia and have an active social life here.

(v) Frequency, regularity and duration of visits overseas.

Case law has shown that a taxpayer can be a resident of a country even if they only spend a short period of time in that country.

You visit Countries A and B to visit family and friends.

(vi) Purpose of visits to or absences from Australia

You visit friends and family in Country's A and B when on holiday. These trips are for no more than three weeks duration.

(vii) Family and business ties to Australia and the overseas country

Family

Your spouse lives with you in Australia.

Business or economic ties

You are working on a full time basis in Australia.

Assets

You have bank accounts in Australia, a house and an investment property. You have a small bank account in the Country A.

Maintenance of Place of abode in Australia

You own a property in Australia. You do not own any property outside of Australia.

Summary

As stated above, no one single factor is decisive, the weight given to each factor depends on individual circumstances, and the word 'reside' should be given the widest meaning.

There are various factors outlined above which indicate that you will be a resident of Australia for tax purposes. Specifically;

Based on a consideration of all of the factors outlined above, you have maintained a strong continuity of association with Australia since moving here. It is your intention to remain in Australia and have taken out Australian Citizenship. Therefore, you will be residing in Australia in accordance with the ordinary meaning of the word.

You will be a resident under the resides test.

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 did not satisfy this test for the first income year but have met it in all other years that this ruling applies as you were not here for more than 183 days in the first income year.

The superannuation test

An individual is still considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person.

Generally this would include a permanent or temporary employee of the Australian Public Service (APS).

As you are not nor have been a Commonwealth Government employee contributing to the PSS or CSS schemes, you are not considered to be a resident of Australia under the superannuation test.

Conclusion.

Given that you have Australian Citizenship, own both a principle residence and investment property in Australia and have full time employment in Australia, we consider you to be a resident of Australia from your date of arrival in Australia.

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