Edited version of private ruling

Authorisation Number: 1011635041494

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Ruling

Subject: Residency

Are you an Australian resident for income tax purposes?

Yes.

This ruling applies for the following period:

Income year ended 30 June 2010

Relevant facts and circumstances

You lived in a foreign country for many years and recently return to Australia to help take care of your elderly parent.

You returned to Australia during the 2009-10 income year and you are uncertain how long you will stay in Australia.

You kept your properties in the foreign country and you rented them out to receive rental income.

You are currently not seeking employment in Australia.

You informed the foreign revenue authority that you have left their country and will be residing in Australia for an indeterminate period of time.

You provided the following additional information on the phone:

· You were originally from Australia.

· You are an Australian as well as a foreign country citizen.

· Your intention is to help look after your elderly parent on a long term basis.

· While in Australia you are doing some internet trading activity and you have registered to teach in Australia.

· You are single and currently living with your sibling in Australia.

Relevant legislative provisions

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

Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our 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 taxation 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 an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests.

The resides test

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'.

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 individuals behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

Paragraphs 19 to 21 of TR 98/17 provide that the quality and character of an individual's behaviour (for example: the way individual arrange his or her domestic and economic affairs as part of the regular order of his or her lives) while in Australia assist in determining whether the individual resides in Australia.

You lived in the foreign country for many years but Australia is your country of origin and you are an Australian citizen. During the 2009-10 income year, you returned to Australia for an indeterminate period of time to help care for your elderly parent. Although you are not actively seeking employment in Australia, you said you have registered to teach in Australia and you do some internet trading. While majority of your assets are overseas, you did not continue to maintain a home in the Foreign country as it is rented out. You are single, your family ties in Australia consist of your elderly parent and a sibling who you are residing with.

Based on these facts, we consider that you are a resident of Australia under 'the resides' test. Your intention or purpose of presence, together with family ties and your behaviour over the time spent in Australia reflects a degree of continuity, routine or habit that is consistent with a person residing here. Although you have only been in Australia for a short period of time, for the income year ended 30 June 2010 you are considered to be an Australian resident from the time you arrived, as you are originally from Australia and your intention is to stay in Australia for an indeterminate period.

Paragraph 33 of TR 98/17 provides that the definition states that a resident means a person who resides in Australia. If they reside here under ordinary concepts, residency status is established and other three tests in the subsection 6(1) definition need not be considered.

As you are consider an Australian resident under 'the resides' test, it is not necessary to consider the other tests for residency.

Accordingly, you are an Australian resident for income tax purposes from the time you arrived in the 2009-10 income year.