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Edited version of your private ruling
Authorisation Number: 1012438008518
Ruling
Subject: Residency
Question and answer
Were you a resident of Australia for taxation purposes?
No.
This ruling applies for the following periods:
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on:
1 July 2010
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You were born in Australia and you are a citizen of Australia.
You had a resident worker contract overseas.
You rented a property overseas which was your primary place of residence.
You had a work visa which is renewed periodically by your employer.
You rented your house out in Australia.
Your partner relocated with you.
You intended to live and work overseas on a permanent basis.
You opened a bank account and had all mail diverted to your address overseas.
You sold your car and boat in Australia.
You purchased new household furnishings overseas to replace those sold or given away in Australia and had your personal effects and sporting equipment transported overseas.
You had a network of friends overseas and you joined a professional sporting club.
Your employment contract included a monthly housing allowance for living expenses.
You and your spouse took two holidays in Australia for a period of approximately 4 weeks in total.
You returned to Australia and established a new place of residence.
Neither you nor your spouse are currently or have ever been Commonwealth Government employees.
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). 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 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 a resident of Australia for tax purposes if they meet the conditions of one of the other three tests.
The resides test
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'.
You worked as a resident employee overseas for a number of months.
You rented an apartment and your spouse accompanied you overseas.
As you were not living and working in Australia you are not considered to be residing in Australia according to ordinary concepts.
The domicile test
If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.
Your domicile of origin is Australia.
In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country.
Although you intended to live overseas on a permanent basis your visa was not permanent and therefore you have not changed your domicile.
The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives.
A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.
You rented the same apartment while overseas.
You purchased furnishings for this property and had your personal effects and sporting equipment transported overseas.
Your partner accompanied you overseas.
You rented out your home in Australia.
Based on these facts, it is therefore considered that you established a permanent place of abode overseas.
The 183-day test
When a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia.
This test does not apply as you were not in Australia for 183 days or more in any income year.
The superannuation test
An individual is still considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person.
Only Commonwealth Government employees are eligible to contribute to the PSS and CSS.
As you and your spouse were not Commonwealth Government of Australia employees you will not be treated as a resident under this test.
Your residency status
You were not a resident for tax purposes under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936. Therefore, you were not considered to be an Australian resident while overseas.