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This edited version has been archived due to the length of time since original publication.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: 1012811312953

Ruling

Subject: Residence

Question and answer

Are you a resident of Australia for taxation purposes?

Yes.

This ruling applies for the following periods:

Year ending 30 June 2015

The scheme commenced on:

1 July 2014

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 Country Y.

You are a citizen of Australia.

You have been living and working in country Z since XXXX.

You hold a temporary visa for Country Z.

You work T weeks on and have S weeks off.

You spend part of the S weeks off in Country Z and part of it in Australia.

You have been spending approximately 6-7 days each S weeks off in Australia to attend to family matters

You have no intention of returning to Australia to live and work in the foreseeable future.

You will spend a total of XX days in Australia during the 20XX financial year.

You are separated from your spouse.

You have adult children in Australia.

You stay in the family home when you return to Australia.

You rent a property in Country Z which you have sole use of.

You do not have a spouse in Country Z.

The only assets you currently have overseas are bank accounts.

You have home, bank accounts a car and personal items in Australia.

You have not taken any of your personal items to Country Z.

You will take personal items to Country Z once family matters have been finalised.

You are not eligible to contribute to the relevant Commonwealth super funds.

Relevant legislative provisions:

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

Income Tax Assessment Act 1936 Subsection 6(1).

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.

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 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 have been living and working in Country Z since XXXX.

You do not intend on returning to Australia to live and work in the foreseeable future.

You return to Australia to deal with family matters during your two weeks off. You spend approximately 6-7 days out of each S weeks off in Australia.

You stay in the family home when you are in Australia.

You have not taken any of your personal items to Country Z.

Based on the facts above you are residing in Australia according to ordinary concepts as you are returning to Australia on a regular basis and you are staying in the family home.

You are a resident under this test.

Whilst it is not necessary to meet more than one test to determine residency for tax purposes (we have already established that you are a resident under the resides test), we will also include a discussion of the 'domicile and permanent place of abode' test as an alternative argument.

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.

In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able 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.

Your domicile of origin is Country Z and your domicile of choice is Australia.

The Commissioner is not satisfied that you have a permanent place of abode outside Australia for the following reasons:

You are a resident under this test.

Your residency status

You are a resident of Australia for taxation purposes.

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