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Ruling

Subject: Residency

Question and answer:

Are you a resident of Australia for income tax purposes?

No.

This ruling applies for the following periods:

Year ended 30 June 2013

Year ended 30 June 2014

Year ended 30 June 2015

The scheme commenced on:

1 July 2012

Relevant facts and circumstances

You were born in Australia and are an Australian citizen.

You are married and have a number of children.

You left Australia in the relevant year to take up an employment contract in an overseas country.

Your employment contract is for an initial period of two years and you consider the contract may be extended by mutual agreement.

The employment contract is with a company that is related to the company you worked for in Australia. You will manage the operations of the local company in the overseas country.

Your spouse and X of your children left Australia with you and will live with you in the overseas country.

Your spouse and Y of your children returned to Australia for a short period for schooling purposes and are returning to the overseas country in the subsequent year.

You are setting up bank accounts and credit facilities in the overseas country.

You have signed a 12 month lease on a property in the overseas country and have furnished the house at your own expense.

You have family pets in the overseas country.

You have joined a local chamber of commerce and you and your spouse have joined a local foundation as volunteers in the overseas country.

You have redirected your mail to the overseas country and cancelled local memberships.

Your Australian assets include a residential property, investment property, motor vehicle, shares and superannuation.

One of your adult children will remain living in the residential property to attend a learning facility.

You will transfer funds to Australia to pay for house mortgage payments and maintenance expenses.

You have no definite plans to return to Australia during the next two years; however you may visit briefly for business purposes.

You will be treated as residents for taxation purposes in the overseas country.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 6-5

Income Tax Assessment Act 1936 Subsection 6(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 Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia, a copy of which is available from www.ato.gov.au.

Given regard to your circumstances as a whole and a consideration of the relevant residency tests, it is accepted that you were not a resident of Australia for tax purposes from the time you left Australia in the relevant year.