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Ruling
Subject: Residency for tax purposes
Question and answer
Are you a resident of Australia for taxation purposes?
Yes.
This ruling applies for the following periods:
Year ending 30 June 2011
Year ending 30 June 2012
The scheme commenced on:
1 July 2010
Relevant facts and circumstances
You are a citizen of Australia.
You were born in Australia.
Carry out volunteer work overseas with your spouse.
You are overseas for a number of months volunteering.
The remainder of the year you spend in Australia and other countries carrying out volunteer work.
You have a family home in Australia which is currently being rented out on a short term lease.
The house you live in when you are overseas is not owned by you and you do not consider it a permanent home.
You have an Australian passport and temporary visa for your work overseas.
You have strong family ties with Australia.
All your assets are in Australia.
You maintain Australian health insurance.
You are a member of various social groups in Australia.
You are a member of a Church in Australia.
You consider that Australia is and will always be your base despite you travelling overseas to carry out your volunteer work.
Neither you nor your spouse has ever been a Commonwealth Government employee.
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
Generally 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 within the tax provisions and provides four tests to ascertain the residency status.
Relevant to your situation are the first two tests which are examined in detail in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia. In examining these tests, IT 2650 provides a number of factors which assist in assessing a taxpayer's situation against the tests. A copy of this ruling is available from www.ato.gov.au.
The resides test
Whether the individual resides in Australia according to the ordinary meaning of the word resides.
In your case you carry out volunteer work overseas for a number of months a year.
You carry out volunteer work in other countries throughout the year.
You do not intend to live on a permanent basis overseas.
Your ties to Australia are closer than overseas as your family are in Australia and you maintain your home in Australia.
Based on these facts, you are residing in Australia according to the ordinary meaning of the word. Therefore, you meet the 'resides test' and are a resident of Australia for tax purposes.
The domicile test
Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia. 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 Australia.
In your case the Commissioner is not satisfied that you have a permanent place of abode outside of Australia because:
You travel to overseas to carry out volunteer work
You maintain a home in Australia
You do not intend to make another country your home
Therefore, you are a resident of Australia under this test.
Your residency status
As you meet the resides and domicile tests, you are considered to be a resident of Australia for tax purposes for the period you are carrying out volunteer work overseas.
Therefore your worldwide income is assessable in Australia.