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Ruling

Subject: Residency status

Question and answer:

Are you a resident of Australia for taxation purposes from the date you arrived in Australia on your working holiday visa?

Yes.

This ruling applies for the following periods:

Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014

The scheme commenced on:

1 July 2010

Relevant facts and circumstances

You are a citizen of country Z.

Your country of origin is country Z.

You entered Australia during the 2010-11 financial year on a working holiday visa.

Your primary intentions at that time were to spend time with someone with whom you met and commenced a relationship when you were in Australia on a previous occasion.

You were intending to establish a permanent relationship with him and to reside permanently in Australia.

You applied for the working holiday visa which was approved shortly before you arrived in Australia.

You subsequently, left your job and made your way to Australia.

This visa type allowed you to stay in Australia for 12 months and you were able to work in Australia for one employer for no more than 6 months during the 12 month period.

While in Australia you were living at the one address.

A few months after arriving in Australia you began working with one employer and finished that employment after 6 months.

You were advised that the conditions of your working holiday visa did not allow you to stay in Australia beyond the 12 months.

You were married in Australia during the 2010-11 financial year.

In order to apply for your spouse visa and therefore be allowed to stay in Australia permanently, you had to leave Australia within the 12 month deadline.

You returned to your mother's place in country Z. This is where you had been living prior to coming to Australia. This was for convenience and economic reasons.

On returning to country Z you submitted your spouse visa application which was subsequently approved.

You returned to Australia during the 2011-12 financial year.

Your assets in Australia include one bank account in your own name and joint bank accounts that you share with your spouse.

You have a 50% ownership interest a property in country Z. This property does not produce any income as you purchased it jointly with your sibling for your parent to live in rent free.

You also have bank accounts in country Z.

Your social and sporting connections with Australia include:

· your spouse and their family;

· friends of your family;

· attendance at the local community church where you have made many friends.

Your social and sporting connections with country Z include:

· family (your parent and siblings and their families)

· friends of the family

· friends from work and school.

Neither you nor your spouse have ever been employed by the Commonwealth Government of Australia.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 6(1)

Reasons for decision

Residency

In order to determine a taxpayer's residency status we need to examine subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). This legislation contains the definition of 'resident' and states that a person may be a resident of Australia where:

· they reside in Australia; or

· have their domicile in Australia; or

· they have been in Australia continuously or intermittently during more than half of the income year, unless the Commissioner is satisfied that their usual place of abode is outside Australia and they do not intend to take up permanent residency.

Another reference is Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia which discusses the Commissioner's interpretation on the residency status of individuals entering Australia. These are available for viewing in total on our website www.ato.gov.au.

Generally the Commissioner regards six months or 183 days as a considerable time when deciding an individual's behaviour is consistent with residing here. The Commissioner is also of the view that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

The following factors assist in identifying the quality and character of an individual's behaviour:

· intention or purpose of presence;

· family and business/employment ties;

· maintenance and location of assets; and

· social and living arrangements.

In your case, you are a citizen of country Z and your country of origin is country Z. From when you arrived until you departed Australia you were living at one address in Australia. Your visa allowed you to work for one employee for a maximum period of 6 months which you did.

You were married in Australia during the 2010-11 financial year and your visa at that time required you to depart Australia within 12 months of arriving. You returned to your mother's house in country Z and submitted your spouse visa application which was subsequently approved. You then returned to Australia permanently during the 2011-12 financial year.

You left Australia only temporarily because your visa at that time required that you leave within 12 months of arriving. You intended to return to Australia on a permanent basis as soon as you received an approved spouse visa.

Furthermore, when you came to Australia on your working holiday visa your long term intention was to establish a permanent relationship with your friend and to reside permanently in Australia.

Taking all the above into consideration, your behaviour since arriving in Australia on your working holiday visa reflects a degree of continuity, routine or habit and is consistent with residing here.

Conclusion

You have been a resident of Australia from when you arrived on your working holiday visa.

As your residency status has been determined under first test listed in the definition contained in the ITAA 1936, we do not need to assess your residency status in relation to the remaining tests.