Edited version of private ruling

Authorisation Number: 1011860753516

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Ruling

Subject: Residency

Questions and answers:

Are you an Australian resident as defined in section 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936)?

No.
This ruling applies for the following periods:

Year ended 30 June 1999
Year ended 30 June 2000
Year ended 30 June 2001
Year ended 30 June 2002
Year ended 30 June 2003
Year ended 30 June 2004
Year ended 30 June 2005
Year ended 30 June 2006
Year ended 30 June 2007
Year ended 30 June 2008
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
Year ended 30 June 2015
The scheme commenced on:

1 July 1998
Relevant facts and circumstances

You are a citizen of both Australia and your country of birth.

You moved to Australia with your parents several years ago.

You lived in Australia until leaving permanently and indefinitely with your spouse.

Since leaving Australia you and your spouse have lived in the same rented accommodation in your country of birth, using this as a base from which to travel to other parts of the world working.

You have provided a copy of a sworn statement from your landlord confirming that you and your spouse have had your permanent residence in a house in your country of birth owned by her since you arrived.

Your spouse was born in Australia and lived there until leaving permanently and indefinitely with you.

When travelling with your work you either stay in accommodation provided by the organisers or in accommodation which you and your spouse rent yourselves.

The period of time spent in each country varied, for the first few years it was usually 1 to 2 weeks with more countries visited.

In the latter years you have travelled to fewer countries working longer in one location.

In all years you return to your country of birth for the summer months and in between work in other countries.

Neither you nor your spouse own a house in Australia.

Prior to moving overseas you lived in rented accommodation which you abandoned on leaving Australia.

You disposed of all your household effects when you left Australia and you have limited clothing and other personal effects stored with family for use during your visits to Australia.

You return to Australia for a period of one or two months each year to work and visit family.

When in Australia you either rent temporary accommodation or, when convenient, stay with family.

You and your spouse have no children or any other dependants.

You are not required to hold a Visa for any country in which you work.

You have family overseas and in your country of birth and you and your spouse have formed close personal relationships and friendships with other people there.

You have also developed strong business connections in your country of birth since leaving Australia.

In recent years you have increased your work in your country of birth, moving all work previously carried out in other countries.

You have credit cards with banks in Australia but no personal bank account. You have an old business account that was previously used in connection with a business that you sold before leaving Australia and which you have only maintained for use in emergencies.

You fund your day to day living expenses and other personal expenses from overseas income and investments.

You have no investments in Australia. You carry on business in other countries in your own name. Only a small percentage of your income is attributable to activities conducted in Australia.

Neither you nor your spouse are registered on the electoral roll in Australia.

At the time of leaving Australia you and your spouse did not have any definite intention to return to Australia to live and you currently have no definite plans to return to Australia to live at any time in the future.

As your personal and business connections with your country of birth grow stronger, you and your spouse are attracted to living their indefinitely.

Neither you nor your spouse are members of a superannuation scheme established by deed under the Superannuation Act 1990 nor do either of them qualify as an eligible employee for the purposes of the Superannuation Act 1976.

You have provided the following in support of your facts:

§ a copy of your passport and ID card;

§ a copy of a sworn statement from the owner confirming that you and your spouse have lived in a house owned by them; and

§ a copy of letters confirming the conduct of work at locations in your country of birth since you left Australia and that these locations are booked for this purposes until dates in the future.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 6(1)
Income Tax Assessment Act 1997 Section 995-1(1)
Reasons for decision

Residency

An Australian resident is defined in subsection 995-1(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). Residency is determined under the following four statutory tests listed under subsection 6(1) of the ITAA 1936:

1. residence according to ordinary concepts (primary test);

2. domicile and permanent place of abode test (first statutory test);

3. 183 day rule (second statutory test);

4. Commonwealth superannuation test (third statutory test);

The 'resides test' is the primary test. If you reside in Australia according to the ordinary meaning of the word, the other tests do not need to be considered. The last three tests are known as the statutory tests, and only need to be considered in cases where a taxpayer is unable to satisfy the resides test.

Residence according to ordinary concepts

Taxation Ruling TR 98/17 explains that the resides test involves determining whether the taxpayer resides in Australia according to the ordinary meaning of the word resides.

According to Macquarie Dictionary (Rev. 3^rd Edition), the ordinary meaning of the word reside is 'to dwell permanently or for a considerable time; have one's abode for a time'. This means that under the resides test, a person is a resident of Australia for tax purposes when their behaviour over a considerable time (generally six months or more) demonstrates a degree of continuity, routine or habit that is consistent with residing here.

You have not been residing in Australia since you left permanently and indefinitely with your spouse. When you were living in Australia you and your spouse were renting accommodation which you abandoned when you left. In addition, you disposed of your household furnishings and you are not registered on the Australian electoral roll. You return to Australia for the purpose of visiting family and working for periods of one or two months each year.

These characteristics do not indicate that you are a resident of Australia under this test.

Domicile and permanent place of abode test

If a person is considered to have their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have permanent place of abode outside of Australia.

There are three types of domicile:

· domicile of origin;

· domicile of choice; and

· domicile by operation of law.

The primary common law rule is that you acquire a domicile of origin at birth. You retain that domicile of origin unless and until you acquire a domicile of choice in another country, or until you acquire another domicile by operation of law. For example, a child's domicile changes when the parents' domicile changes. In practice, an individual who has always lived in Australia will retain a domicile here when absent overseas, unless they choose to permanently migrate to another country.

Your domicile is the place that is considered by law to be your permanent home. You may in fact have no fixed place of abode but the law requires you to have a domicile.

Taxation Ruling IT 2650 points out that in order to show that a new domicile of choice in a country outside Australia has been adopted, you must be able to prove an intention to make your home indefinitely in that country, for example through having obtained a migration visa.

IT 2650 advises further that if an individual with a usual place of abode in Australia has no fixed or habitual place of abode overseas but moves from one country to another or moves constantly within the same country (for example, from town to town or even from suburb to suburb) any association with a particular place overseas would be purely temporary or transitory and he or she would not be considered to have adopted an alternative domicile of choice or a permanent place of abode outside Australia.

In such circumstances, if the person could not be said to have acquired a domicile of choice outside Australia, the taxpayer would be a resident of Australia under subparagraph 6(1)(a)(i) of the definition of 'resident' in the ITAA 1936.

The determining factors in your case are:

· you are a citizen of both Australia and your country of birth;

· you moved to Australia with your parents several years ago;

· you lived in Australia for over twenty years until leaving permanently and indefinitely with your spouse;

· you and your spouse were living in rented accommodation in Australia which you abandoned when you left;

· you disposed of your household furnishings before you left Australia;

· you return to Australia for 1 or 2 months each year to visit family and work;

· you and your spouse have lived in the same rented accommodation in your country of birth since leaving Australia and you use this as a base from which you travel to other parts of the world to work;

· you have family in your country of birth and you have formed close personal relationships and friendships with other people there;

· you have developed strong business connections there since leaving Australia;

· you have credit cards with banks in Australia but no personal bank accounts;

· you sold your business in Australia before leaving and you maintain an old business account for use in emergencies;

· you have no investments in Australia;

· you do not have any definite plans to return to Australia to live at any time in the future;

Your domicile of origin is the place you were born. You then moved to Australia with your parents and acquired a new domicile of choice in Australia. You and your spouse have now left Australia permanently and indefinitely and have lived in your country of birth ever since. As you are a citizen of your country of birth you are not required to hold a Visa to live or work there.

Because you have stated that you and your spouse left Australia permanently and indefinitely and have no definite intention to return to Australia to live, you have been based in the same accommodation in your country of birth since you departed Australia, you are a citizen of your country of birth and your domicile of origin was formerly your country of birth, you are considered to have acquired a new domicile of choice in your country of birth.

In addition, the determining factors listed above would also indicate that you and your spouse have established a permanent place of abode outside Australia.

You are not a resident of Australia under the domicile and permanent place of abode test.

The 183-day test

Under the 183-day test, a person will be an Australian resident if they are present in Australia for 183 days during the year of income 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.

You have not been present in Australia for more than 183 days during a year of income since you left. You are not a resident of Australia under the 183 day test.

The superannuation test

Under the superannuation test, a person will be an Australian 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 and your spouse are not members of the PSS or the CSS. Therefore, you are not a resident under this test.

Conclusion

According to the facts provided, you are not an Australian resident from the date of your departure as you do not satisfy any of the four residency tests listed in subsection 6(1) of the ITAA 1936.