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Edited version of private advice
Authorisation Number: 1012618622523
Ruling
Subject: Residency
Question and answer:
Were you a resident of Australia for taxation purposes while you were living in overseas with your parents?
Yes.
This ruling applies for the following periods
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
1 July 2008
Relevant facts
You were born in Australia and you are a citizen of Australia.
You went overseas with your parents.
The visas you entered the overseas country on did not allow you or your parents to stay permanently in the overseas country.
Your parents had no intention on staying overseas on a permanent basis.
For the period you were overseas with your parents you were under the age of 18 and were a dependant.
Your parents' employer provided your accommodation overseas.
Your parents rented their house out in Australia for the period they were overseas.
Your parents were eligible to contribute to a relevant Commonwealth Superannuation fund.
You were under the age of 16 for the first year you were overseas.
You left the overseas country when you were 18 years old.
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 Taxation Ruling 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 went to overseas with your parents.
• Your parents were employed overseas.
• You were a dependant for the period you were overseas.
• You left when you were 18 years old.
• Your parents had no intention in staying overseas on a permanent basis.
• You lived in employer provided accommodation overseas.
• Your parents rented out their home in Australia for the period they were overseas.
You were residing in Australia according to ordinary concepts for the period you were overseas.
As you meet the resides test there is no need to consider the domicile, 183 day and superannuation tests.
Residency Status
You were a resident of Australia for taxation purposes for the period you were overseas.