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Edited version of private ruling
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Ruling
Subject: residency
Questions and answers:
Are you a resident of Australia for taxation purposes?
Yes.
This ruling applies for the following period:
1 July 2008 to 30 June 2012
The scheme commenced on:
1 July 2008.
Relevant facts and circumstances:
You were born overseas.
You are a citizen of another country.
You came to Australia with your wife and children in 20XX.
You have a temporary resident visa that is valid until 2013.
You intend to reside in Australia permanently.
You have purchased your own home in Australia.
You do not have a permanent place to live overseas.
You do not have any assets overseas.
You are not employed in Australia.
You receive an invalid pension from overseas and pay tax on that income overseas.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 995-1(1).
Income Tax Assessment Act 1936 Subsection 6(1).
Reasons for decision
Residency for taxation purposes
Taxation Ruling TR 98/17 - Income tax: residency status of individuals entering Australia notes that it is not necessary for an individual to be an Australian citizen or hold a permanent residence visa to be a resident of Australia for taxation purposes.
The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are:
· the resides test,
· the 183 day test,
· the domicile and permanent place of abode test, and
· the superannuation test.
If one of these tests is met, an individual will be a resident of Australia for taxation purposes.
Taxation Ruling TR 98/17 states that the resides test is the primary test for determining the residency status of an individual for taxation purposes. If residency is established under the resides test, the remaining tests do not need to be considered.
The resides test
The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'.
The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01 defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.
TR 98/17 notes that the ordinary meaning of the word 'reside' is wide enough to encompass an individual who migrates permanently to Australia, or one who is simply dwelling in Australia for a considerable time.
In most cases, the Commissioner accepts that a visit to Australia of less than six months is not sufficient time to be regarded as residing here. However, when an individual is in Australia for six months or more, the Commissioner takes into consideration the individual's behaviour over the time spent in Australia to determine if there is any degree of continuity, routine or habit in the individual's behaviour that is consistent with residing here.
In assessing an individual's behaviour while in Australia, the Commissioner considers a number of factors, including:
· intention or purpose of presence,
· maintenance and location of assets, and
· social and living arrangements.
In your case, you arrived in Australia in November 20XX and intend to remain here permanently. Your wife and children have accompanied you to Australia, you have purchased a home in Australia and you have no assets overseas.
In view of the above, the Commissioner considers that your behaviour in Australia reflects a degree of continuity, routine and habit that is consistent with residing here. Accordingly, you are considered to be an Australian resident for taxation purposes from the time you arrived in Australia.