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Subject: Residency for tax purposes
Question and answer:
Were you a resident of Australia for the period you were in Australia?
Yes.
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commenced on:
1 July 2011
Relevant facts and circumstances
You were born overseas and are a citizen of an overseas country.
You came to Australia with your spouse due to work commitments.
You did not intend to live and stay in Australia.
While in Australia you stayed in hotel and rental accommodation.
The accommodation was paid for by your spouse's employer.
You maintained your home overseas while you were in Australia.
Your neighbours and friends collected your mail and kept an eye on your home while you were away.
You did not acquire any assets while you were in Australia.
Neither you nor your spouse have ever been or are currently Commonwealth government employees.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1).
Income tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Subsection 995-1(1).
Reasons for decision
Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose of the Income Tax Assessment Act 1936 (ITAA 1936).
The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are:
1. the resides test
2. the domicile test
3. the 183 day test
4. 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. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident for tax purposes if they satisfy the conditions of one of the three other tests.
The resides test
The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd 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'.
When an individual arrives in Australia not intending to reside here permanently all the facts about his or hers presence must be considered in determining residency status.
The period of physical presence or length of time In Australia is not by its self decisive when determining whether an individual resides here period.
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.
Whether a considerable time has elapsed to demonstrate that the individual's behaviour has the required continuity, routine or habit is a question of fact; that is, it depends on the circumstances of each case. The Commissioner's view of the law is that six months is a considerable time when deciding whether the individual's behaviour is consistent with residing here.
In your case you came to Australia with your husband for the duration of his 9 month work contract.
You obtained employment on a short term contract while you were in Australia.
You lived in a hotel with your husband and then in a fully furnished apartment for the remainder of your stay in Australia.
The Commissioner is satisfied that your behaviour while in Australia is consistent with that of someone residing in Australia according to ordinary concepts.
You are a resident under this test.
As you meet the resides test it is not necessary to look at the domicile, 183 and superannuation tests.
Your residency status
You were a resident of Australia for taxation purposes for the duration of your stay in Australia.