Edited version of your private ruling

Authorisation Number: 1012103023525

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Ruling

Subject: Residency

Question and answer:

Were you a resident of Australia for the duration of your stay in Australia during the 2010-11 financial years?

Yes.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commences on:

1 July 2010

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You were born in the County A.

You migrated on a permanent resident visa in 2010.

After arriving in Australia you stayed at your spouse's parents' house.

You had kept your job and continued with this employment during your time in Australia.

You kept your bank account open and transferred money as needed to your Australian bank account.

Several months after arriving in Australia your family and you were undecided about wanting to live in Australia permanently.

You decided to fly back to Country A and your spouse applied for citizenship.

You currently live in this apartment and you are still contracted with the same Company.

You have no social or sporting connections with Australia.

You have social and sporting connections with Country A.

You have never been employed by the Australian Commonwealth Government but your spouse was some years ago.

Neither of you have a super fund.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 6(1)

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Detailed reasoning

The terms resident and resident of Australia, in regard to an individual, are explained in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The legislation lists four tests which will help us ascertain whether you were a resident of Australia for income tax purposes for the duration of your time in Australia. These tests are:

(I)   residence according to ordinary concepts;

(ii)  The domicile/permanent place of abode test;

(iii)   The 183 days/usual place of abode test; and

(iv)   The Commonwealth superannuation test.

The primary test for deciding your residency status is whether you lived in Australia according to the ordinary meaning of the word resides.  However, where you do not reside in Australia according to ordinary concepts, you may still be considered to be a resident of Australia for tax purposes if you satisfy one of the other three tests.

The resides test

The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3^rd 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'.

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.

You migrated with your family to Australia on a permanent resident visa in 2010. You were living in the home of relatives until you departed Australia to return to Country A.

You and your family were in Australia for a total period of less than 183 days.

You were a resident of Australia for taxation purposes for the period of your stay as you were residing according to ordinary concepts.

As you were a resident of Australia for taxation purposes under the resides test it is not necessary to look at the domicile, 183 day and superannuation tests.

Your residency status:

You were a resident of Australia for taxation purposes for the period of your stay.

You are required to declare all income both in and out of Australia in your Australian tax return for that period.