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This edited version has been archived due to the length of time since original publication.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: 1013069463060

Date of advice: 10 August 2016

Ruling

Subject: Residency

Question and answer

Are you a resident of Australia for taxation purposes from XX 2014 until XX 2015?

Yes.

Are you a resident of Australia for taxation purposes from XXX 2015 until XX 2016?

No.

This ruling applies for the following periods:

Year ending 30 June 2016

Year ending 30 June 2015

The scheme will commence 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 are a citizen of Australia and Australia is your country of origin.

You left Australia to work in country A on #.

You had a residence visa to enter country A. The visa allowed you to stay in country A as long as you had employer sponsorship.

You had a residence Visa to enter the country B which required renewal every two years.

You moved to country A to work on a contract with your employer from # until #.

Your employer provided you with accommodation in country A due to the nature of the project.

You returned to Australia at the conclusion of your contract with your employer to seek longer term employment overseas.

You secured permanent employment with an employer in the country B.

You left Australia on # and intended to remain in country B for an indefinite period.

In country B your employer provided you with your initial accommodation during the settling-in period, then you were required to find your own accommodation and pay for it.

Before you left Australia to live in country A you had separated from your spouse, no longer lived in the family home, sold your motor vehicle, arranged storage of your personal effects, and advised the Electoral Commission that you would be living overseas indefinitely.

You maintained your Australian bank account to allow payment of your health fund premium until your child turned 18, which was a condition of your marriage separation.

In country B you had a long term lease in your name, a vehicle provided by your employer and intended to arrange shipment of your personal possessions.

You were unexpectedly asked to return to Australia due to your child's poor health.

You returned to Australia on # and will possibly remain for several years to support your child and former spouse.

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 moved to country A to work on a project from # until #.

Your employer provided you with accommodation in country A due to the nature of the project.

Before you left Australia to live in country A you had separated from your spouse, no longer lived in the family home, sold your motor vehicle, arranged storage of your personal effects, and advised the Electoral Commission that you would be living overseas indefinitely.

You returned to Australia at the conclusion of your contract with your employer to seek longer term employment overseas.

You secured permanent employment with an employer in country B.

You left Australia on # and intended to remain in country B for an indefinite period.

In country B you had a long term lease in your name, a vehicle provided by your employer and intended to arrange shipment of your personal possessions.

Based on the facts above your contract in country A ended when the outbreak was controlled and you returned to Australia as your base to search for further employment. It is considered that you remained an Australian resident for tax purposes for the period of # until #.

For the period of # until #, you were not residing in Australia according to ordinary concepts due to your permanent employment, living arrangements and intention to remain in the country B indefinitely.

The domicile test

If a person's domicile is 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 Australia.

The Commissioner is satisfied that you had a permanent place of abode outside Australia when you were in country B for the following reasons:

Your permanent place of abode remained Australia while you were in country A as your contract ended and you returned to Australia as your base to seek further employment.

You are a resident between # until #.

You are not a resident between # until # under this 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 are a resident under this test for the period # until # as the Commissioner considers that your usual place of abode remained Australia.

You are not a resident under this test for the period # until #.

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 are not eligible to contribute to the relevant Commonwealth superannuation funds.

You are not a resident under this test.

Your residency status

You remained an Australian resident for tax purposes for the period # until #.

You are not a resident of Australia for taxation purposes for the period # until #.

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