Edited version of your written advice

Authorisation Number: 1012795490201

Ruling

Subject: Residency

Question and Answer

Are you a resident of Australia for taxation purposes?

No

This ruling applies for the following periods:

Year ending 30 June 2015

Year ending 30 June 2016

The scheme commences on:

1 July 2014

Relevant facts and circumstances

You were born in Australia.

You are an Australian citizen.

You departed Australia on a one way ticket to work in Country X.

You have not been back to Australia since departure and have no plans to return to Australia any time soon.

Your current contract with your employer states it is for a minimum of 1 year.

When the end of your contract approaches, you are hoping to be offered a longer contract and stay in Country X.

Your visa is only for 364 days as this was easier to obtain at the time. However, it is renewable.

You intend to live and work in an overseas country as long as possible as your employer has various offices overseas. However, if no other overseas positions are available, you will return to Australia.

You do not have a spouse or children.

You maintain an Australian bank account.

You were renting in Australia prior departure.

You have a block of land and a loan against it. You were planning on building a house to live in. You stopped the building process when you received the job transfer. You will keep this block of land as an investment.

You are renting in Country X. You took your personal belongings to Country X.

You have advised the Australian Electoral Office to have your name removed from the electoral roll.

You have not advised Medicare to have your name removed from their records.

You have kept minimal private health insurance in Australia.

You are not a Commonwealth government of Australia employee for superannuation purpose.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

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

Reasons for decision

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 taxation 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'.

The question of whether an individual 'resides' in a particular country is a question of fact and degree and all the circumstances of the taxpayer are taken into account in arriving at a decision.

In your case, there are various factors that indicate that you are no longer residing in Australia. Specifically:

• you relocated to Country X for work purposes;

• you intend to live and work in overseas countries indefinitely;

• you have established your own rental accommodation in Country X; and

• you do not have a place to live in Australia.

Based on the information provided, it is considered that you are not residing in Australia according to the ordinary meaning of the word.

Therefore, you are not a resident of Australia for taxation purposes under this test.

The domicile test

Under this test, a person is a resident of Australia for taxation purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia.

Domicile

A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. A person may acquire a domicile of choice in another country if they have the intention of making their home indefinitely in that country.

The intention needs to be demonstrated in a legal sense, for example, by way of obtaining a migration visa, becoming a permanent resident or becoming a citizen of the country concerned.

In your case, you were born in Australia; therefore, your domicile of origin is Australia and there is no evidence to suggest that you have established a new domicile in Country X.

Therefore, your domicile is still Australia.

Permanent place of abode

It is clear from the case law that a person's permanent place of abode cannot be ascertained by the application of any hard and fast rules. It is a question of fact to be determined in the light of all the circumstances of each case.

The courts have considered a person's 'place of abode' is where they consider 'home'. In R v Hammond (1852) 117 E.R. 1477, Lord Campbell CJ stated that "a man's residence, where he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression."

In your case, as mentioned above, there are various factors that indicate that you have established a permanent place of abode outside of Australia. Specifically:

• you do not have a spouse or children in Australia;

• you have established your own rental accommodation in Country X; and

• you do not have a place to live in Australia;

Based on the information provided, the Commissioner is satisfied that your permanent place of abode is outside of Australia.

Therefore, you are not a resident of Australia for taxation purposes under this test.

The 183 day test

Under the 183 day test, a person is a resident of Australia for taxation purposes if they are actually physically present in Australia for more than 183 days in an income year, unless the Commissioner is satisfied that their usual place of abode is outside of Australia and they have no intention of taking up residence here.

In your case, you have not been back to Australia since departure and have no plans to return to Australia any time soon.

Therefore, you are not a resident of Australia for taxation purposes under this test as you will not spend more than 183 days in Australia in an income year while you are based overseas.

The superannuation test

A person will be considered a resident under the Commonwealth superannuation fund test if they or their spouse currently contribute to certain superannuation funds for Commonwealth government employees.

You are not a resident of Australia for taxation purposes under this test as you are not employed by the Australian Commonwealth government.

Summary

As you do not meet any of the above tests, you are not a resident of Australia for taxation purposes from the date you departed for Country X.