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Edited version of your private ruling
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Ruling
Subject: Residency
Question:
Are you a non resident of Australia?
Answer:
Yes
This ruling applies for the following period
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
The scheme commenced on
1 July 2010
Relevant facts
Your country of origin is Country X and you are a citizen of Country X.
You have been travelling in and out of Australia for several years and travel on a 'resident return' visa.
Your adult children live in Australia.
Your sole purpose for visiting Australia is to visit your adult children who are completing their studies and work in Australia.
When you visit Australia you stay at one of your children's house.
You have no intention to reside permanently in Australia.
You are a Director of Company X in Australia which is a trustee of your family trust. You do not receive any fees or income from this entity and the company does not trade.
Your main source of income is derived from shares held with Country X companies and you have substantial shareholdings in those companies.
You are a Director of two listed Country X companies.
You are a director for a private Country X company.
In Country X you own:
· A residential property
· Block of land
· 2 motor vehicles
· shareholdings
Your spouse and youngest child live in Country X.
Each time you depart Australia it is to return to Country X to take care of your businesses.
Your spouse travelled with you to Australia on some occasions with you and your youngest child accompanied you for three weeks on one occasion.
You have some savings accounts in Australia where you earn a small amount of interest. You have no other assets in Australia.
You do not have any superannuation accounts in Australia.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 subsection 6(1)
Income Tax Assessment Act 1997 subsection 995-1(1)
Reasons for decision
An Australian resident for tax purposes is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be a person who is a resident of Australia for the purposes 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:
· 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.
If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.
Where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident if they meet the conditions of one of the 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'.
You travel in and out of Australia and stay for short periods of time with your adult children. Your spouse and younger child and your family home are in Country X. Accordingly you are not residing in Australia.
As you do not meet the resides test, we will need to consider whether you meet any of the other three tests of residency.
The domicile test
Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia.
Domicile
Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence.
Your domicile is not Australia because your country of origin is Country X and you are a Country X citizen.
Therefore, under the domicile test you are a non resident of Australia for tax purposes.
The 183 day test
Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia.
As you will not be present in Australia for more than one-half of the income year you for the financial years ended 30 June 2011 and 2013 you are not a resident under the 183 day test.
For the financial year ended 30 June 2012 you were in Australia for a non continuous period of 187 days. However because your usual place of abode is in X and you do not intend to reside in Australia, you are not a resident under the 183 day test for the year ended 30 June 2012.
The superannuation test
An individual is still considered to be a resident of Australia if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) of the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS.
As you do not meet the above conditions you are not a resident under this test.
Conclusion
As you do not meet any of the above tests, you are not a resident of Australia for tax purposes. As you are not a resident of Australia, according to section 6-5 of the ITAA 1997, your assessable income only includes income gained from sources in Australia.