Edited version of your written advice

Authorisation Number: 1012745453830

Ruling

Subject: Residency

Question and answer

Are you a resident of Australia for taxation purposes?

No.

This ruling applies for the following periods:

Year ended 30 June 2014

Year ended 30 June 2015

Year ended 30 June 2016

The scheme commenced on:

1 July 2013

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 are a citizen of country A and you were born in country A.

You entered Australia on a Visa which allows you to live and work in Australia as long as you remain a country A citizen.

You have not been granted permanent residency in any other country.

You will leave Australia before in 20XX to visit family in country C then transit through Australia on route to country B to join your spouse.

Your spouse is living and working in country C on an employment contract (with the possibility of extension).

You will obtain a multiple entry work visa which does not allow you to live in country B permanently.

You are completing a Doctorate in Australia.

You will be completing research while in country B.

You current work contract with the University runs out soon and there will not be a job held for you in Australia.

You live in your own home in Australia.

You will live in a company apartment provided by your spouses' employer in country B.

Your assets outside of Australia include household effects and bank accounts in country A.

In Australia your assets include:

Motor vehicle $

Household effect (jointly) Approx $

Home workshop tools $

Property with mortgage of $

Two joint bank accounts $

Two bank accounts in your name $

Your household effects remain in Australia until you move to country A in 20XX. You intend leaving larger furnishings with the house which you intend making available for rent.

You intend to receive rental income from your property in Australia.

You will return to Australia on occasions to complete data collection and meet with academic supervisors from the university. You anticipate future visits to relate to conference attendance or presentation of your research, social occasions and holidays with family and friends.

In Australia your social and sporting connections include your work colleagues and family.

You and your spouse have never been a Commonwealth Government of Australia employee.

You have never applied for Australian residency, so have not advised the electoral office to remove your name from the electoral role.

You have advised Medicare and/or your health insurance provider to have your name removed from their records.

Relevant legislative provisions:

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

Income Tax Assessment Act 1936 Subsection 6(1).

Reasons for decision

Residency

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.

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 TR 98/17 Income Tax: residency status of individuals who enter Australia, and Taxation Ruling IT 2650 Income Tax: residency status of individuals who temporarily live outside Australia.

Taxation Ruling TR 98/17 states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

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

You are a citizen of country A and you were born in country A.

You are not a permanent resident or citizen of any other country.

You will leave Australia in early 20XX to visit family in country A then transit through Australia on route to country B to join your spouse.

You will obtain a multiple entry work visa which does not allow you to live in country B permanently.

You live in your own home in Australia.

You will live in a company apartment provided by your spouses' employer in country B.

You will not be physically present in Australia from early 20XX onwards except on occasions to complete data collection and meet with academic supervisors from the university. You anticipate future visits to relate to conference attendance or presentation of your research, social occasions and holidays with family and friends.

Based on the facts above you will not be residing in Australia according to ordinary concepts from your date of departure in early 2015.

The domicile test

If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.

You were born in country A and you have not changed your domicile to Australia as you have not taken steps to become a permanent resident or citizen of Australia. Therefore you are not a resident of Australia under this test.

The 183-day test

Where a person is present in Australia for 183 days 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.

You will not be in Australia for more than 183 days from the date of your departure in early 20XX onwards.

You are not a resident under this test.

The superannuation test

An individual is still considered to be a resident if that person is eligible to contribute to the PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee.

You have never been Commonwealth Government employees.

You are not a resident under this test.

Your residency status

You are not a resident of Australia for taxation purposes from the date of your departure in late early 20XX.