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Edited version of private ruling
Authorisation Number: 1011658017949
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
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Ruling
Subject: Residency
Are you an Australian resident for tax purposes?
Yes.
This ruling applies for the following period<s>:
30 June 2010
30 June 2011
30 June 2012
The scheme commences on:
1 July 2009
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You are a citizen of Australia.
You have an immigration visa for Country X.
You departed Australia, for country X, in 2009 with your children. Your spouse lives in Country X and purpose of your trip to Country X was to take your children to their mother and help them settle in.
Your intention was to return to Australia in 2010 however your children were not settled in Country X and you extended your stay until 2011.
Your intention is to stay in Country X temporarily only.
You came back in 2010 to rent your house to tenants.
You own a house in Australia as well as some shares and a bank account. You have owned your house since before 2000. All your relatives and friends live in Australia.
You are on the Australian electoral role.
You do not own any assets in Country X. You are staying in the house owned by your spouse. You do not have any other social or other connections in Country X. You do not have any employment contracts in Country X.
Reasons for Decision
An Australian resident is defined in subsection 995-1 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:
1. The resides test
2. The domicile test
3. The 183 day test
4. The superannuation test
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. 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', 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'.
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.
You will not be residing in Australia for a period during 2009 to 2011. Therefore, you will need to be considered an Australian resident under of the other three tests.
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 to 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.
Generally, persons leaving Australia temporarily would be considered to have maintained their Australian domicile unless it is established they have acquired a different domicile of choice or by operation of law.
Taxation Ruling IT 2650 also explains that a permanent place of abode does not have to be everlasting or forever, where it does not have to be where 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 have stated that it is your intention to live permanently in Australia. As there is no evidence of intention to make your home indefinitely outside of Australia, you are considered to have maintained your Australian domicile.
In addition, although you will be staying in Country X for a period during 2009 to 2011, your associations with Australia are considered to be more significant for the following reasons:
· Your intention is to return to Australia at a definite point that is 2011.
· Your intention has always been to visit Country X temporarily to support your children to settle in Country X.
· You own a property in Australia and you do not own any assets in Country X.
· Your relatives and family live in Australia.
· You have shares and bank accounts in Australia.
· You are on the electoral role in Australia.
· You do not have any employment or other connections in Country X.
Based on these facts, it is considered that you have not established a permanent place of abode in Country X. You will therefore be considered to be a resident of Australia for tax purposes under the domicile test.
Accordingly, as you are an Australian resident, your assessable income includes income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.