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Ruling
Subject: Residency
Question and answer:
Are you a resident of Australia for tax purposes?
Yes.
This ruling applies for the following periods:
Year ended 30 June 2009
Year ended 30 June 2010
The scheme commenced on:
1 July 2008
Relevant facts and circumstances
You left the Country X
You were granted a X year, visa before leaving the Country X.
Your spouse accompanied you to Australia.
You commenced full time employment in Australia.
You were sponsored by Z Ltd.
Your permanent accommodation in the Country X was rented on a 12 month lease.
It was your intention to live and work in Australia for a period of 4 years.
Initially in Australia you rented an apartment for X month.
You then rented a residential property for Y months.
Finally you rented a residential property for Z months.
You decided to return to the Country X after the birth of your child.
You returned to the Country X.
Relevant legislative provisions
Section 6-5 of the Income Tax Assessment Act 1997.
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.
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 domicile test,
· the 183 day test, and
· 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.
However, where an individual does not reside in Australia according to ordinary concepts, they will 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. 5th 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'.
You and your spouse were residing in the Australia as evidenced by:
· renting a residential property,
· residing with your spouse,
· working full time, and
· your intention to live in Australia for an extended period of time.
· which only changed with the birth of your child.
Therefore, you are considered to have been residing in Australia until you returned to the Country X.
As you are a resident of Australia under the resides test, it is not necessary to consider whether you meet any of the three statutory tests.
Your residency status
For the time you lived in Australia, between the X until your departure on the X, you are considered to be a resident of Australia under the resides test, outlined in subsection 6(1) of the ITAA 1936.