Edited version of private ruling

Authorisation Number: 1011467700575

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Ruling

Subject: Residency status

Question

Are you an Australian resident for tax purposes?

Answer

Yes

This ruling applies for the following period

Year ending 30 June 2010

The scheme commenced on

1 July 2007

Relevant facts and circumstances

You are a citizen of Australia.

Your country of origin is Australia.

You and your spouse sold the house you owned in Australia. You sold your furniture and most of your possessions.

You then moved onboard your sailing yacht and lived aboard it.

During this period you continued your usual full time employment and lifestyle.

You later ceased employment and set off sailing on your extended holiday.

You then departed Australia and sailed bound for Country A.

You carried on sailing around Country A, Country B and Country C.

During this time, all the countries you entered were on tourist visas only and you did not work in any of them.

You then left your yacht in Country B and flew to Country D on a working holiday visa.

You and your spouse were employed by Company X in Country D. This employment lasted for a few months.

During this time you became pregnant.

You returned to living on board your yacht in Country B.

You then returned to Australia to see your family and friends, organise bank accounts, driver's licences and other personal needs.

You stayed in Australia with friends.

You then departed Australia and flew to Country D for a Christmas holiday, staying with some friends.

You did not work in Country D during this stay.

You returned to Australia and moved in with your parents as you were unable to afford rent or furnish/equip a house.

You sold your sailing yacht since it no longer suited your lifestyle with a baby on the way.

You and your spouse gained employment on your return.

You worked for your previous employer.

Your child was born. You are no longer able to work since you are the primary care giver of your child.

Your spouse returned to Country D on a working visa and is employed by Company X again for the same work done previously in Country D.

You purchased a house in Country D while being back in Australia.

You have not moved into this house yet but intend to do so.

You are currently living with your parents until this time.

Currently you can only stay in Country D on a working or tourist visa.

You applied for permanent residency in Country D. You have not heard anything back to know if it is being processed.

Residency processing generally takes a few months.

You came back to Australia:

· to give birth to your child

· ensure your child's Australian citizenship

· have family/friends support with a new baby

· stay in Australia until your spouse finishes work in Country D, then you can all move into the new house together in Country D

· wait to hear back about how your Country D residency application is processing

· gain employment to earn some money to support yourself

· have some stability back after travelling for a long period of time.

You will depart Australia.

You have a Country D working holiday visa.

The purpose of your visit overseas is to move into your house in Country D.

You intend to reside in Country D for some time, depending on how your family enjoys it, and if your residency is granted.

You are unsure on when you will return to Australia. It depends on how you like Country D.

You will not come back to Australia for any period after you leave Australia.

You have a permanent place to live in Country D.

You purchased a home in Country D but have not lived in it. You intend to move into it in the next few months.

Your child will accompany you to Country D. Your spouse is already in Country D working there.

You do not have an employment contract overseas.

You do not have any relatives living in Country D.

You have a house, car and a bank account in Country D.

You are boarding with your parents in Australia. You do not own the house and you do not own any property in Australia.

You have bank accounts in Australia.

Social and sporting connections you have with Australia include family, friends and church.

You don't have any social or sporting connections in Country D other than some friends.

You and your spouse were not employees of the Commonwealth Government of Australia.

Relevant legislative provisions

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

Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision

An Australian resident is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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. These tests are:

· the resides test

· the domicile test

· the 183 day test

· the superannuation test

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.

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 ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3^rd 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'.

Taxation Ruling TR 98/17 considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

In your case, it is considered that you are an Australian resident for tax purposes under the resides test for the following reasons:

· you are an Australian citizen

· you came back to Australia to have some stability back after travelling for a long period of time

· you gained employment to earn some money to support yourself (you are no longer able to work since you are the primary care giver of your child)

· you gave birth to your baby in Australia to ensure their Australian citizenship and have family/friends support with a new baby

· you are currently living with your parents

· you have bank accounts in Australia

· social and sporting connections you have with Australia include family, friends and church.

Based on the information you have provided, it is considered that you are an Australian resident for tax purposes as your behaviour reflects a degree of continuity, routine or habit that is consistent with residing here.

Note

Accessing your superannuation

Generally, most of your superannuation must be held in a complying superannuation fund or retirement savings account until your earliest retirement age, which is at least 55 years old. This money is often called your preserved benefit. Some people may have unpreserved benefits which can be paid out before their earliest retirement age.

Generally, you must reach preservation age before you can access your super. Use the following table to work out your preservation age.

Please contact Superannuation enquiries on 13 10 20 for more information.