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Edited version of private ruling
Authorisation Number: 1011631057729
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Ruling
Subject: Residency
Are you a resident of Australia for taxation purposes?
Yes.
This ruling applies for the following period
1 July 2008 to 30 June 2014.
The scheme commenced on
1 July 2008.
Relevant facts
You were born in Australia.
You studied overseas then returned to Australia.
You had no employment overseas.
You left Australia, travelled and have remained living in country A.
You last returned to Australia in 20XX.
You intend to return to Australia in 2011.
All of your family is in Australia.
You do not intend to live overseas on permanent basis.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 6(1).
Income Tax Assessment Act 1997 Section 6-5.
Income Tax Assessment Act 1997 Subsection 995-1(1).
Reasons for decision
Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose 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, and
· the superannuation test.
The first two tests are examined in detail in Taxation Ruling IT 2650.
The resides 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 an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident for tax purposes if they satisfy the conditions of one of the three other tests.
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'.
In your case, you left Australia to study and travel. As you are not living in Australia, you are therefore not considered to be residing in Australia according to ordinary concepts.
The domicile test
If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.
In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able prove an intention to make his or her home indefinitely in that country.
The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives.
A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.
In your case:
· you do not have a permanent place of abode outside Australia
· you intend to return to Australia, and
· your domicile is in Australia.
Based on these facts, it is considered that you have not established a permanent place of abode outside Australia. Consequently, you satisfy the domicile test.
Due to you satisfying the requirements under the domicile test it is not necessary for us to consider the 183 day test or the superannuation test.
Your residency status
You are a resident of Australia for taxation purposes.