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This edited version has been archived due to the length of time since original publication.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: 1051215108710

Date of advice: 24 April 2017

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

No

This ruling applies for the following periods:

Year ending 30 June 2017

Year ending 30 June 2018

Year ending 30 June 2019

Year ending 30 June 2020

The scheme commences on:

2017

Relevant facts and circumstances

You country of origin is the Foreign Country X.

You are a citizen of Australia and the Foreign Country X.

You have a Foreign Country X and Australian passport.

You were employed by an Australian company.

You lost your employment and there are no employment opportunities in the near future in Australia.

You are divorced from your spouse; the divorce was granted.

Most of your household effects were transferred to your ex-spouse as part of the divorce settlement.

Your personal items will be put into storage until you set up your life abroad.

You departed for the Foreign Country X.

You lived in a rented house prior to your departure.

You stay with your family while in the Foreign Country X.

You currently do not have any employment in the Foreign Country X.

You intend to live in overseas permanently.

You have no intentions to permanently resettle in Australia.

You have advised the Australian Electoral Commission that you were departing Australia.

You have advised Medicare to have your name removed from their records.

You are not members of any clubs or associations in Australia.

You and your ex-spouse have never been Commonwealth Government of Australia employees for superannuation purposes.

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 taxation 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:

The first two tests are examined in detail in Taxation Ruling IT 2650 - Income tax: residency - permanent place of abode outside Australia. The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes.

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

Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency.

Accordingly you are not a resident of Australia for taxation purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from the day you departed for the Foreign Country X.

Further information

The Commissioner does not rule for indefinite or extended periods of time as there may be changes to the facts of the arrangement or the law relating to residency. Also, a public ruling may issue which affects the private ruling.

If your status changes from resident to non-resident before the end of an income year you should answer 'yes' to the question 'Are you an Australian resident?' on your tax return for that year. This ensures you are taxed at resident rates for that part of the tax year you were resident in Australia.

Your non-residency for part of the year will be taken into account by a reduction in your tax-free threshold for that year. You will be entitled to a pro-rata tax-free threshold for the number of months you were an Australian resident during the income year. To do this, you will need to complete question A2 on your tax return 'Part-year tax-free threshold'

Non-residents of Australia do not have to pay the Medicare levy, so you can also claim the number of days that you were not an Australian resident during a tax year in your return as exempt days.

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