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Edited version of your private ruling
Authorisation Number: 1012502618380
The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.
Ruling
Subject: Residency
Question and answer
Are you a resident of Australia for tax purposes?
Yes
This ruling applies for the following periods:
Year ended 30 June 2013
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
You are a citizen of another country.
You entered Australia on a working holiday visa.
You have been in Australia since 2013.
You are looking to migrate permanently onto a partner visa once your current visa has expired.
You have bank and superannuation accounts in Australia.
You have worked for brief periods in Australia since you arrived.
You are not receiving income from non-Australian sources.
You are living with your de facto in Australia.
You intend to apply for a partner visa at the end of your current visa in order to remain permanently in Australia.
You do not plan to leave Australia.
You have a permanent place to live in Australia.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that 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 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, and
· the superannuation test.
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'.
Taxation Ruling TR 98/17 Income Tax: residency status of individuals entering Australia emphasises the quality and character of an individual's behaviour while in Australia assists in determining whether the individual resides here.
All the facts and circumstances that describe an individual's behaviour in Australia are relevant. In particular, the following factors are useful in describing the quality and character of an individual's behaviour:
· intention or purpose of presence
· family and business/employment ties
· maintenance and location of assets, and
· social and living arrangements.
No single factor is necessarily decisive and many are interrelated. The weight given to each factor varies depending on individual circumstances.
In your case, you intend to remain in Australia permanently. You do not intend to return to your country of origin permanently. You have a permanent place of residence in Australia. Your partner is in Australia. Your ties to Australia are much stronger than your ties to your country of origin. These facts show that you are residing in Australia. As you are residing in Australia, you are therefore a resident of Australia for tax purposes.
As you are a resident under this test, it is not necessary to determine whether you meet the requirements of the other three tests of residency.
Your residency status
As you meet the resides test, you are a resident of Australia for tax purposes.
As you are a resident of Australia, according to section 6-5 of the ITAA 1997, your assessable income includes income gained from all sources, whether in or out of Australia.