Edited version of your written advice

Authorisation Number: 1012697533398

Ruling

Subject: Residency for taxation purposes

Question and answer:

Are you a resident of Australia for taxation purposes?

Yes.

This ruling applies for the following period:

1 July 2013 to 30 June 2015.

The scheme commenced on:

1 July 2013.

Relevant facts and circumstances:

You are a citizen of another country.

You came to Australia for a holiday.

You were injured in an accident.

You have been forced to remain in Australia to receive treatment for your injuries.

You have lived with a relative since you came to Australia.

You are hoping to have recovered enough to return to your home country within a few months.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 995-1(1).

Income Tax Assessment Act 1936 Section 6(1).

Reasons for decision

Residency of Australia for taxation purposes

Whether or not a person will be considered a resident of Australia for taxation purposes depends on the individual circumstances of each person. It is important to note that it is not necessary for an individual to be an Australian citizen or to have a permanent residence visa to be a resident of Australia for taxation purposes.

Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for taxation purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).

Subsection 6(1) of the ITAA 1936 provides four tests to ascertain whether an individual is a resident of Australia for taxation purposes. These tests are:

• the resides test,

• the domicile test,

• the 183 day test, and

• the superannuation test.

If any one of these tests is met, an individual will be a resident of Australia for taxation purposes.

The resides test is the primary test for determining the residency status of an individual for taxation purposes. If residency is established under the resides test, the remaining three tests do not need to be considered. However, if residency is not established under the resides test, an individual will still be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests.

The resides test

The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. Because the word 'reside' is not defined in Australian taxation law, it takes it's ordinary meaning for the purposes of the resides test.

In Dempsey and Commissioner of Taxation [2014] AATA 335 (29 May 2014) the Administrative Appeals Tribunal noted that the settled position of the courts (at ultimate appellant level) as to the meaning of the word resides in the ITAA 1936 is that the word:

bears its ordinary English meaning, which 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 came to Australia for a holiday. You were injured in an accident and have been forced to stay in Australia to receive treatment for your injuries. You have been residing with relatives since you came to Australia.

Considering your circumstances we accept that you have been residing in Australia (albeit because of circumstances that were forced on you) since the day of your accident. Accordingly, we consider that you have been a resident of Australia for taxation purposes from that date and that you will remain a resident for taxation purposes until you have recovered from your injury to the extent that you can leave Australia.

Conclusion

You have been a resident of Australia for taxation purposes since the date of your accident.

You will remain a resident of Australia for taxation purposes until you have recovered sufficiently from your injury to leave Australia.