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Edited version of your private ruling
Authorisation Number: 1012350576039
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Ruling
Subject: Residency for tax purposes
Questions and answers
1. Are you a resident of Australia for taxation purposes for the period you are overseas?
No.
2. Are you required to declare your income derived overseas in your Australian tax return?
No.
3. Are you required to declare your income derived in Australia in your Australian tax return?
Yes.
This ruling applies for the following periods:
Year ending 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
You and your spouse will be leaving to work overseas later in the relevant year.
You and your spouse will be overseas for at least X years and more than likely will extend your contract beyond Y years.
Your family will accompany you overseas to live.
You and your spouse will lease a residence while overseas.
You and your spouse have rental properties in Australia.
You and your spouse have a home in Australia which may be rented out for the period you are overseas.
You and your spouse will have 1 bank account in Australia which the rental income will be deposited into.
The majority of your belongings will be sent overseas.
The Commonwealth super test does not apply to you or your spouse.
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
To understand your tax situation, you must first work out whether you are an Australian resident for tax purposes. Australian residents are generally taxed on their worldwide income and non-residents are generally taxed only on their Australian-sourced income.
The definition of 'resident' within tax law 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
You do not meet any of the above tests and are not considered a resident of Australia for tax purposes from when you leave Australia to live and work overseas.
You will be required to declare your rental income and any other income derived in Australia in your Australian tax return.
The factsheet Residency - what you need to know provides details of the above residency tests and may be obtained from our website www.ato.gov.au.