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Edited version of private ruling
Authorisation Number: 1011691521624
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Ruling
Subject: Residency status
Question:
Are you a resident of Australia for taxation purposes?
Answer: Yes.
This ruling applies for the following period
Year ended 30 June 2014
Year ended 30 June 2013
Year ended 30 June 2012
Year ended 30 June 2011
The scheme commenced on
1 July 2010.
Relevant facts
You are from overseas.
You came to Australia with your family to work.
You have now been offered a position outside Australia.
Your family will not move with you.
You have a home and other assets in Australia.
Your children go to school in Australia.
You will make trips back to Australia as part of your work contract.
Your family will travel overseas to visit you.
You intend to return to Australia after your contract ends.
You consider Australia your home.
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 xxxx xxxx . As you are not currently living in Australia and don't intend to live here for the near future, 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, based on the following information:
· Your family did not accompany you overseas;
· You do not intend to purchase any property overseas;
· You have substantial assets in Australia;
· You intend to return to Australia at the end of your work contract.
It is considered that you have not established a permanent place of abode outside Australia. Consequently, you satisfy the domicile test.
As you have met the domicile test it is not necessary to consider the 183 day test or the superannuation test.
Your residency status
You are a resident of Australia for taxation purposes and therefore required to declare all income derived both inside and outside Australia in your Australian tax return.