Edited version of private ruling

Authorisation Number: 1011694542834

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Ruling

Subject: Residency

Question

Are you a non resident of Australia for tax purposes?

Answer

Yes.

This ruling applies for the following period:

Income year ending 30 June 2006

Income year ending 30 June 2007

Income year ending 30 June 2008

Income year ending 30 June 2009

Income year ending 30 June 2010

The scheme commences on:

1 July 2005

Relevant facts and circumstances

You left Australia to go to Country A on a spousal/work visa to be with your boyfriend/husband.

You left Australia with the intention to be in Country A indefinitely.

You have a permanent place to live in Country A.

You do not have a permanent place to live in Australia.

Relevant legislative provisions

Subsection 995-1(1) of the Income Tax Assessment Act 1997.

subsection 6(1) of the Income Tax Assessment Act 1936

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 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. 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. If the primary test is satisfied the remaining three tests do not need to be considered.

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 tax 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'.

As you are residing outside Australia from the date of your departure in March 2006 and your visits to Australia since that time has been very short, you are not considered to be residing in Australia.

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 domicile outside of Australia.

"Domicile" is a legal concept to be determined according to the Domicile Act 1982 and to the common law rules which the courts have developed in the field of private international law. The primary common law rule is that a person acquires at birth a domicile of origin, being the country of his or her father's permanent home. This rule is subject to some exceptions. For example, a child takes the domicile of his or her mother if the father is deceased or his identity is unknown. A person retains the domicile of origin unless and until he or she acquires a domicile of choice in another country, or until he or she acquires another domicile by operation of law (Henderson v. Henderson [1965] 1 All E.R.179; Udny v. Udny [1869] L.R.1 Sc.& Div. 441; Bell v. Kennedy [1868] L.R.1 Sc.& Div. 307 (H.L.)) .

In determining a person's domicile for the purposes of the definition of "resident" in subsection 6(1), it is necessary to consider the person's intention as to the country in which he or she is to make his or her home indefinitely. Thus, a person with an Australian domicile but living outside Australia will retain that domicile if he or she intends to return to Australia on a clearly foreseen and reasonably anticipated contingency.

Generally speaking, persons leaving Australia temporarily would be considered to have maintained their Australian domicile unless it is established that they have acquired a different domicile of choice or by operation of law. 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 e.g., through having obtained a migration visa. A working visa, even for a substantial period of time such as 2 years, would not be sufficient evidence of an intention to acquire a new domicile of choice.

Based on the following you

· have gone to Country A to be with your boyfriend/husband while he completes his studies.

· have been working in Country A.

· intend to live in Country A indefinitely on a spousal/work visa.

You have proved that you have an intention to make your home indefinitely outside Australia. Therefore the Commissioner is satisfied that you have a domicile outside Australia.

The 183-day test

Under this test, if you are actually present in Australia for more than half the income year, whether continuously or intermittently, you may be said to have a constructive residence in Australia unless it can be established that:

· your usual place of abode is outside Australia, and

· you have no intention to take up residence here.

You have not been present in Australia for more than 183 days continuously or intermittently during the income year ending 30 June 2007 to 30 June 2010. Therefore 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. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS.

This test does not apply to you as you are not an employee of the Commonwealth Government of Australia.

Your residency status

As you are not a resident of Australia under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936, you are not an Australian resident for taxation purposes from the time you left Australia.

Note:

You can lodge a request for amendment to your income tax return two years after the date the original assessment was given to you.

For earlier income years, you can apply for extension of time to lodge an objection. In your application, you should outline the following details:

· What caused the delay in lodging your objection request?

· What efforts did you make to ensure it was lodged on time?

· When did you first become aware that the relevant taxation decision (for example, your assessment notice) was incorrect?

· How did you find out that the decision was incorrect?

When you lodge an EOT send copies of your original assessment notice, return or other documents and correspondence relating to the decision.