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Edited version of your written advice
Authorisation Number: 1012982936483
Date of advice: 10 March 2016
Ruling
Subject: International - Residency
Questions and answers:
Are you a resident of Australia for income tax purposes?
No.
This ruling applies for the following periods:
1 July 2014 to 30 June 2015
1 July 2015 to 30 June 2016
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 both the Country X and Australia.
You travel between the Country X, Australia and various other locations for your work.
You have an Australian bank account which your salary is deposited into and a Country X bank account which you have had since you migrated to Australia.
You have an adult child who lives and studies in Australia.
You are a member of an Australian superannuation fund which your employer contributes to.
You are a member of various sporting clubs in Australia.
You owned property in Australia which was used as your main property.
You owned an investment property in Australia.
You sold your main property in X and your investment property prior to departing to Country X.
You moved back to Country X with your spouse to care for their parent.
You accepted a contract with a company in Australia.
You purchased property in Country X for your spouse and yourself.
You purchased another property in Australia for work use and accommodation for your child.
Whilst in Australia you visit your child and travel for work purposes.
This time you spent a lot less than 183 days in Australia over the tax periods in question.
You intend to permanently reside in Australia again at some point in the future.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).
The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. The 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. If residency is established under the resides test, the remaining three tests do not need to be considered.
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 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'.
Although the question of whether a person resides in a particular country is a question of fact, the courts have referred to and taken into account various factors considered to be relevant. These are:
• whether the person is physically present in that country at some time during the year of income
• the history of the person's residence and movements
• if the person is a visitor to the country, the frequency, regularity, duration and purpose of the visits
• if the person is outside the country for part of the relevant income year, the purpose of the absences
• the family and business ties which the person has with the particular country, and
• whether a place of abode is maintained by the person in the relevant country or is available for his or her use while there.
Taxation Ruling IT 2650 emphasises the intended and actual length of the individual's stay in an overseas country, any intention to return to Australia or travel elsewhere, the establishment or abandonment of any residence, and the durability of association that the individual maintains with a particular place in Australia as the main factors to be considered when determining the residency status of individuals leaving Australia.
• You moved to Country X with your spouse to care for their parent, buying property there.
• You spend the majority of your time in Country X, travelling to Australia to visit your child and undertake your work.
• Whilst you own and maintain a property in Australia the use of the property is for your child to have a place to live and for you to stay when you travel around the country for work.
• You state that you intend to return to Australia to reside permanently but you have no definite date as to when that will occur.
• You have employment ties within Australia however, the family ties you have outside of Australia are considered stronger.
• The purchasing of property in Country X also indicates the intention to remain there on long term basis.
Therefore, you do not meet the requirements of the resides test.
The domicile test
If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.
A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. In order to show that an individual's domicile of choice has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country.
The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives.
You are originally from the Country X and are still a citizen of Country X as well as being an Australian citizen.
You had adopted an Australian domicile of choice when you became a citizen of Australia and began living permanently in Australia.
You made a permanent move from Australia to live in Country X meaning you adopted Country X as your domicile of choice. You returned to Australia for employment and you have no current intention to make permanent residence here again. Your domicile is Country X.
In any event the commissioner is satisfied that you have a permanent place of abode outside Australia.
Therefore, you do not meet the requirements of the domicile test.
The 183 day test
Under the 183 day test, a person is a resident of Australia 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 permanent place of abode is outside of Australia and they have no intention of taking up residence here.
Whilst you have been in and out of Australia for the last two tax periods you have not been in Australia for 183 days or more in either of those periods.
Accordingly, you will not be a resident of Australian for income tax purposes under the 183 day test.
The superannuation test
An individual is considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS.
Whilst you do contribute to a superannuation scheme, you are not an employee of the Commonwealth Government of Australia and you are not a contributing member of the PSS or CSS.
Therefore, you are not a resident of Australia for income tax purposes under the superannuation test.
Your residency status
Accordingly for the you are not a resident of Australia for income purposes as you do not meet any of the residency test requirements outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA1997.