Edited version of your written advice

Authorisation Number: 1013016135460

Date of advice: 18 May 2016

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 2012

The scheme commenced on:

1 July 2011

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 citizen of country A and country A is your country of origin.

You were hoping to be able to reside in Australia permanently with your spouse.

You arrived in Australia on #.

You were in Australia for the following periods and returned to country A at the end of each trip:

You have a Visa subclass Spouse (Migrant) Visa to enter Australia which is a 5 year visa.

Your spouse remains in Australia permanently and you return to country A where you are employed and look after your elderly parents.

You have not remained permanently in Australia with your spouse due to financial, employment and family responsibilities in country A

When you are in Australia you stay with your spouse on a property you purchased jointly.

When you are in country A you live in your permanent residence. You must maintain a permanent residence in country A to be eligible to keep your certification required for your employment there.

It is crucial for you to maintain a permanent home in country A so that you can earn income and maintain your position within a number of companies.

All of your personal possessions, furniture and clothing are stored at your residence in country A.

You do not lease your home in country A when you are in Australia.

You receive income from a number of sources in country A.

You do not have employment in Australia.

You have not applied for Medicare or a driver's license in Australia.

You have a TFN as you thought it was necessary because of your partnership with your spouse. You hope that this enterprise you are setting up will be able to support you coming to Australia to live on a permanent basis in the future.

Your social connections are all in country A.

Relevant legislative provisions:

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

Reasons for decision

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 IT 2650 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 arrived in Australia on #.

• You were in Australia for the following periods and returned to country A at the end of each trip:

• Your spouse remains in Australia permanently and you return to country a where you are employed and look after your elderly parents.

• You have not remained permanently in Australia with your wife due to financial, employment and family responsibilities in country A.

• You receive income from a number of sources in country A.

• You do not have employment in Australia.

• You have not applied for Medicare or a driver's license in Australia.

• You have a TFN as you thought it was necessary because of your partnership with your spouse. You hope that this enterprise you are setting up will be able to support you coming to Australia to live on a permanent basis in the future.

Based on the facts above you are not residing in Australia according to ordinary concepts.

The domicile test

If a person's domicile is Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.

In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able 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.

A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.

Your domicile of origin is country A. Your domicile of choice is country A.

The Commissioner is satisfied that you had a permanent place of abode outside Australia for the following reasons:

• When you are in country A you live in your permanent residence. You must maintain a permanent residence in country A to be eligible to keep your certification there.

• It is crucial for you to maintain a permanent home in country A so that you can earn income and maintain your position within a number of companies.

• All of your personal possessions, furniture and clothing are stored at your residence in country A.

• You do not lease your home in Country A when you are in Australia.

• You receive income from a number of sources in country A.

• You do not have employment in Australia.

• You have not applied for Medicare or a driver's license in Australia.

You are not a resident 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 were not in Australia for more than 183 days in the relevant financial year.

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 and your spouse are not eligible to contribute to the relevant Commonwealth super fund.

You are not a resident under this test.