Disclaimer
This edited version has been archived due to the length of time since original publication.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: 1013083465951

Date of advice: 5 September 2016

Ruling

Subject: Residency status

Question and Answer

Are you a non-resident of Australia for tax purposes from the date of your departure from Australia on date A?

Yes

This ruling applies for the following period

1 July 200X to 30 June 2020

The scheme commences on

1 July 200X

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 Country X citizen by birth.

You arrived in Australia many years ago with your family.

You obtained Australian citizenship on date B.

You returned to Country X on date A and have been living in Country A since then.

Since your departure from Australia, your intention has been not to return to Australia to live and/or work permanently.

Your place of accommodation in Country X is owned by your family.

You were married to a non-Australian. Your spouse is not a citizen or resident of Australia.

You live in Country X with your spouse and your family.

Your sibling lives in Australia. You have no other family in Australia.

You visit Australia for short periods.

You were enrolled on the Australian electoral roll after you became an Australian citizen but removed your name from the electoral roll upon your departure from Australia.

You previously held an Australian Medicare card however the Medicare card has expired and has never renewed by you.

Your assets in Australia are:

Your assets in Country X are:

You have not revoked your Australian citizenship as both Country X and Australian allow dual citizenship.

Neither you nor your spouse is an eligible member of a relevant Commonwealth superannuation fund.

Reasons for decision

Residency

An Australian resident for taxation purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) as 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' are defined in subsection 6(1) of the ITAA 1936. The definition gives us a series of tests which assist in determining whether a person is a resident of Australia. 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 you do not reside in Australia according to ordinary concepts, you may still be a resident of Australia for tax purposes if you meet the conditions of any one of the other three tests.

We refer to Taxation Ruling IT 2650 Income tax: residency - permanent place of abode outside Australia which provides guidelines for determining whether individuals who leave Australia to live overseas cease to be Australian residents for income tax purposes during their overseas stay.

1. Residency according to ordinary concepts test 

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'.

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:

The weight given to each factor varies with individual circumstances and no single factor is necessarily decisive.

In your case, you have not been and will not be residing in Australia for the purposes of, the resides test, for the following reasons:

As you have been living in Country X, indefinitely, from when you left Australia on date A, you are not a resident of Australia for tax purposes under this test.

We now need to examine the remaining tests to determine your residency status.

Other residency tests

Even where a taxpayer is not considered to 'reside' in Australia in accordance with the ordinary meaning of the term, the taxpayer will still be considered to be a resident of Australia for domestic taxation purposes where they meet one of the other three residency tests, being the domicile and permanent place of abode test, the 183 day test and superannuation fund test.

2. The domicile and permanent place of abode 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.

Domicile

A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. A person may acquire a domicile of choice in another country if they have the intention of making their home indefinitely in that country. The intention needs to be demonstrated in a legal sense, for example, by way of obtaining a migration visa, becoming a permanent resident or becoming a citizen of the country concerned.

Your domicile of origin is Country X as you were born in Country X. You arrived in Australia many years ago your family and you obtained Australian citizenship on date B. Thus Australia became your domicile of choice.

You returned to Country X on date A and have been living in Country X since then. You live with your spouse and your family. Since your departure from Australia, your intention has been not to return to Australia to live and/or work permanently. Accordingly, your domicile of choice has reverted back to your domicile of origin, ie Country X.

As your domicile is not Australia you are not a resident of Australia under this test.

3. The 183-day test

Under this test, if you are actually present in Australia for more than half the income year, whether continuously or intermittently, you may be said to have a constructive residence in Australia unless it can be established that your usual place of abode is outside Australia and you have no intention to take up residence here.

You visit Australia for short periods. You have not been and do not intend to be present in Australia for more than 183 days continuously or intermittently.

Thus, you are not a resident under this test.

4. The superannuation test 

You will be a resident if you are eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or you are the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS.

Neither you nor your spouse has ever been eligible to contribute to the PSS or CSS. Therefore, this test does not apply to you.

Your residency status

As you are not a resident of Australia under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936, you are not an Australia resident for income tax purposes as of date A.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).