Edited version of private ruling

Authorisation Number: 1011629285120

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Ruling

Subject: ResidencyI

Were you a resident of Australia for the period of your stay in Country A?

Yes.

This ruling applies for the following period

Year ended 2009

Year ended 2010

The scheme commenced on

1 July 2008

Relevant facts

You are a citizen of Australia and your country of origin is Australia.

You separated from your spouse and maintained no contact with your children.

You have your parent and sibling living in Australia and you maintained regular contacts with them during your stay outside Australia.

You have friends in Australia.

You left Australia for career opportunities overseas.

You secured an assignment in Country A.

You stated:

· you disposed of all your belonging and possessions before leaving Australia permanently as you had no intension to return to Australia to reside

· you settled in Country A, base of your employment, with postings to various part of Country B, Country C and Country D

· you had no tangible assets in Australia

· you have bank accounts in Australia which you use to enable ongoing commitments to your ex-spouse

· you have your preserved contributions in a superannuation fund in Australia

· you did not have a valid Medicare card, private health insurance or mobile phone account in Australia

· you own a private company, Company X, in Australia, and you were the sole shareholder and sole director of that company

· you contracted yourself out to your client's in Country A and Country D using Company X to provide your professional services for several months

· the contract between Company X and the client in Country D ceased and replaced with you directly.

Company X lodged a tax return in Australia during the period of your stay outside Australia.

Company X was deregistered after several months of lodging a tax return in Australia.

You stated:

· you shared an apartment in country A that belonged to one of your best friends

· you stayed in that apartment until your return to Australia

· there was no formal lease agreement between you and your friend who owned that apartment

· you paid ongoing contributions towards the occupancy expenses on a regular basis, and

· you had exclusive use to the accommodation in Country A including the periods you were travelling due to work commitments in Country B and Country D.

You did not own any assets in Country A except your personal belongings like books, clothing, sporting equipment, electronic goods like mobile phones, iPods, computer and so on.

You visited a gym, did running and horse riding but due to your work commitments had little time for leisure.

You knew some friends in Country A before settling in Country A and have a number of friends during social activities, from work and through mutual contacts.

Your friends in Country D mainly constitute colleagues and clients whom you worked with.

You do not have any relatives in Country A or Country D.

You fell sick while travelling in Country E and on an advice from your doctor in Country E you returned to Australia to seek medical treatment.

Your employment contract in Country D was also terminated.

You are currently residing in community accommodation.

You stayed in motels, with relatives and friends during your visits to Australia.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

The terms 'resident' and 'resident of Australia', in regard to an individual, are described in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition includes four tests to assist in determining whether you are 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.

However, where you do not reside in Australia according to ordinary concepts, you may still be considered to be a resident of Australia for tax purposes if you meet the conditions of one of the other three tests.

1. The resides test

The ordinary meaning of the word reside, according to the dictionary definition, is to dwell permanently, or for a considerable time, to have ones settled or usual abode, to live in or at a particular place.

In your case, you stated you left Australia permanently for Country A. You visited Australia on a regular basis to meet your parent and sibling. You are not considered to be residing in Australia for the period you were residing in Country A, but the continuity of your stay in Country A was interrupted by several regular visits to Australia, therefore we cannot consider you to be residing in Country A for the whole period.

2. The domicile test

In order to show that a new domicile of choice in a country outside Australia has been adopted, you must be able to prove an intention to make your home indefinitely in that country.

A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which you intend to live for the rest of your life. An intention to return to Australia in the foreseeable future to live does not prevent you in the meantime setting up a permanent place of abode elsewhere.

Residency for income tax purposes is a question of facts and it changes as the facts change. A statement that you left Australia permanently is not sufficient to ignore your assets and links to Australia. As the facts submitted by you show no evidence of intention to make your home indefinitely outside Australia, you are considered to have maintained your Australian domicile.

In addition, your associations with Australia are considered to be more significant for the following reasons:

· your country of origin is Australia and you are a citizen of Australia

· although divorced from your spouse, you maintained your commitment to your children in Australia

· you maintained regular contacts with your parent, sibling and friends in Australia during your employment in Country A

· you owned a private company, bank accounts and superannuation in Australia and your company got deregistered several years after you left Australia

· your income from your employment in Country A and Country D is deposited in an Australian bank account

· you made several regular trips to Australia since first departing Australia and you resided in motels, with relatives and friends during your visits

· although you paid ongoing contributions towards the occupancy expenses but you did not have any formal lease agreement to show your commitment of setting up a domicile in Country A

· you do not have any assets Country A except your personal belongings.

Based on these facts, it is considered that your association with Australia was more significant compared to Country A and your facts confirm that you did not established a permanent place of abode in Country A. You are therefore considered to be a resident of Australia for tax purposes under the domicile test.

Your residency status

As you are deemed to be a resident of Australia under the domicile test of residency outlined in subsection 6(1) of the ITAA 1936 there is no need to examine the remaining tests. Therefore, you remained an Australian resident for taxation purposes during your stay in Country A.