Edited version of private ruling

Authorisation Number: 1011678116718

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Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer: No.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commenced on:

1 July 2010

Relevant facts

You are a citizen of Australia.

You were born in Australia.

You currently live overseas and will do so for more than 3 years.

You have a permanent resident visa in the overseas country.

You do not intend to live overseas permanently.

You do not have a return date to Australia other than you will return at some stage in the future.

You are renting a property.

You have some assets here in Australia.

Your spouse accompanied you to Canada.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 6(1)

Income Tax Assessment Act 1997 Section 6-5.

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:

1. The resides test.

2. The domicile test.

3. The 183 day test.

4. The superannuation test.

The first two tests are examined in detail in Taxation Ruling IT 2650.

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 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'.

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.

In your case, you left Australia in the 2008-09 income year. As you have not been 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 left Australia in the 2008-09 income year;

· you are renting a home

· you have a work contract.

· You will be away from Australia for more than 3 years.

Based on these facts, it is considered that you have established a permanent place of abode outside Australia. Consequently, you do not satisfy the domicile test.

183 day test

When a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia.

In your case you left Australia in the 2008-09 income year and you have no plans to return to Australia in the near future.

You are not a resident under this test.

The superannuation test

An individual is still considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person.

You currently hold a Commonwealth Government position outside Australia and you currently do not have a superannuation fund to which funds are being deposited. If your employer does start paying super it will not be to the PSS or CSS.

You are not a resident under this test as you are not currently contributing to a super fund and if you do start contributing to a fund it will not be a complying fund.

Your residency status

You are a non-resident of Australia for taxation purposes.