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This edited version has been archived due to the length of time since original publication.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: 1051199769724

Date of advice: 7 March 2017

Ruling

Subject: In relation to your residency status

Question

Are you a resident of Australia for the period 1 July 2017 to 30 June 2018?

Answer

Yes.

This ruling applies for the following periods

Year ended 30 June 2018.

The scheme commences on

1 July 2017.

Relevant facts and circumstances

Your spouse accepted a two year contract in Country X.

You intend to return to Australia when your spouse's contract concludes.

There is a possibility the contract may be extended.

You travelled on a visa which is valid for 12 months.

You did not inform the Australian Electoral Commission or Medicare that you were departing.

You received a suspension on your private health insurance for up to two years.

You are living in rental accommodation which was arranged by your spouse's employer.

You have maintained your main residence in Australia with it being looked after by a housesitter.

You have maintained investment properties within Australia.

You have notified your bank that you were travelling and living abroad but you have not requested to have withholding tax deducted as you do not consider yourself a non-resident for tax purposes.

You have purchased a few household effects since moving overseas.

You have not lodged any overseas income tax returns.

You maintain your professional and social connections in Australia as you remain in contact with your previous work colleagues and your family members through social media.

You remain a member of the D Association.

You have not established any professional, social or sporting connections in Country X.

You have not obtained any overseas qualifications.

Your spouse has never been employed by the Commonwealth of Australia.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

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

Reasons for decision

Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes 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', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. The tests are:

If any one of these tests is met, an individual will be a resident of Australia for taxation purposes.

Where a taxpayer has immediate family in Australia and has maintained assets in Australia, under these circumstances they would be considered a resident of Australia for taxation purposes because they either meet the domicile and or the resides test(s) under subsection 6(1) of the ITAA 1936.

In your circumstances whilst you and your spouse are living overseas you have maintained your main residence in Australia. The accommodation that you are living in overseas is a rental property that was arranged for by your spouse's employer. You also have a set time frame for your stay overseas and have voiced your intention to return to Australia after this date.

As well as this you have maintained professional and social connections within Australia whilst also not pursuing professional, social and sporting connections overseas. You have maintained your investments within Australia and have not requested withholding tax on your Australian bank account as you believe you are an Australian resident for tax purposes.

Considering the above and the facts provided you will meet the resides and/or the domicile test as you still hold significant connections to Australia.

Accordingly you are a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.

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