Edited version of your private ruling

Authorisation Number: 1012609941582

Ruling

Subject: Residency

Question 1

Are you a resident of Australia for taxation purposes?

Answer

Yes.

This ruling applies for the following period

Year ending 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts and circumstances

You are a member of a religious order.

You have gone to Country Y on a student visa.

You do not intend on living in Country Y on a permanent basis.

You work for the religious order in Country Y.

Your religious order provides you with accommodation in Country Y.

You continue to be a member of the province of your religious order based in an Australian city.

You have no intention to join the province that covers Country Y.

Your order also receives a stipend for your services in Country Y.

You return to Australia for about eight weeks a year.

You maintain bank accounts, credit cards and investments in Australia.

You have one personal bank account in Country Y and one for the religious order in Country Y.

You have never been a Commonwealth Government employee.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 995-1(1)

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

Residency

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.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the:

• resides test;

• domicile and permanent place of abode test;

• 183 day test; and

• Commonwealth superannuation fund test.

The primary test for deciding the residency status of each individual is whether they reside in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.

The resides (ordinary concepts) test

The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word 'resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test.

Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides' test:

i. physical presence in Australia

ii. nationality

iii. history of residence and movements

iv. habits and "mode of life"

v. frequency, regularity and duration of visits to Australia

vi. purpose of visits to or absences from Australia

vii. family and business ties to different countries

viii. maintenance of place of abode.

These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in IT 2650 Income tax: residency - permanent place of abode outside Australia and Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.

It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances.

You have gone to Country Y on a student visa. The religious order provides your accommodation and provides your religious institution with a stipend for your services.

You do not intend on living in Country Y on a permanent basis.

You intend on returning to Australia for short visits.

You are residing in Australia according to ordinary concepts.

As you meet the resides test there is no need to consider the domicile, 183 day and superannuation tests.

Residency Status

You are a resident of Australia for taxation purposes.