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Ruling
Subject: Residency
Question:
Are you a resident of Australia for tax purposes?
Answer:
Yes.
This ruling applies for the following periods
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You are a country A citizen and country A is your country of origin.
You arrived in Australia on a working holiday visa.
You arrived on your own with the intention of being in Australia on a working holiday.
You intend to live in Australia permanently now and are marrying an Australian citizen.
You will apply for a permanent visa.
You left Australia for a short period of time. You took your fiancé to country A to meet your family.
You have visited various states (each for short stays no longer than 2 weeks) since arriving in Australia.
You have a permanent place to live in Australia with your fiancé's parents until your fiancé graduates. You began living there earlier in the income year or late in the previous income year.
When you arrived in Australia you began looking for work in the area you are living and privately studied English.
You began work in a restaurant in the area you are living then began work with another restaurant in the same area where you are currently employed.
You have a joint bank account with your fiancé in Australia.
You have a bank account in country A.
You lived with your mother in the family home in country A before you arrived in Australia. If you return to country A in the future you will live there again.
You do not have an employment contract in Australia.
You have sporting connections and social connections in Australia.
You have social connections in country A.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1).
Income Tax Assessment Act 1997 Subsection 995-1(1).
Reasons for decision
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) and sub section 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). 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
· 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.
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'.
Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. An individuals behaviour over the time spent in Australia must reflect a degree of continuity, routine or habit that is consistent with residing here.
You:
· arrived in Australia
· will be applying for a permanent resident visa
· intend residing in Australia permanently and are marrying an Australian citizen
· have lived with your fiancé's family since earlier in the income year or late in the previous income year
· began work in a restaurant in the area you are living then began work with another restaurant in the same area where you are currently employed; and
· left Australia for a short period of time so your fiancé could meet your family.
Based on this information, it is considered you were residing in Australia as you are living permanently with your fiancé's parents and you have only left Australia for a short period of time since your arrival. You are applying for a permanent resident visa and you have lived and worked in the one area. This suggests a degree of routine, regularity or habit that is consistent with residing here.
As you have passed one of the tests of residency, we do not need to consider the remaining tests. You are a resident under the resides test and so meet the definition of resident of Australia for tax purposes under subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997.