| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012408591871
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Residency
Question and answer
Are you a resident of Australia for taxation purposes?
Yes
This ruling applies for the following periods:
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You left Australia for Country A for employment reasons.
You intended to return to Australia within two years.
Due to the Global Financial Crisis your employer required you to continue your employment in Country A.
You maintained investments in Australia including at least one bank account.
You have recently taken up a private health insurance policy in Australia prior to your return to Australia.
Close family members have remained in Australia.
You were diagnosed with a serious illness whilst overseas.
This medical condition has prevented you from returning to Australia.
On the advice of your specialist in country A you have had to remain in Country A for ongoing treatment including close monitoring of your condition and multiple life saving medications you are required to undertake.
You have undergone intensive treatment involving hospital stays for the condition.
In 2012 your specialist recommended that you not go on long international flights until the ongoing tests indicated stability in your condition so that you could return to Australia for monitoring and treatment or, tests indicated an acceleration in your condition, requiring surgery which after convalescence would allow you to return to Australia.
Testing of your condition in 2012 found that the condition had stabilised and you could now return to Australia. You have begun searching for employment in Australia.
You will return to Australia shortly. You will rent out the property you own in Country A.
You will be living with a member of your family, while you search for an apartment to live in upon your return to Australia. You will continue to seek employment upon your return to Australia.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection6(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 first two tests are examined in detail in Taxation Ruling IT 2650.
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. 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.
Your circumstances are similar to those established in FCT V Executors of the Estate of Subrahmanym [2001] FCA 1836
The resides test
The ordinary meaning of the word 'reside', according to the dictionary definition, 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.
In your case, you were residing in Country A for an extended period due to an illness that precluded you from returning to Australia due to medical treatment. It was your intention to return to Australia permanently but this could not happen until your medical condition stabilised. You are considered to be residing in Australia under this test.
As you are considered to be a resident under the residency test there is no reason to consider the other tests.