Edited version of your written advice

Authorisation Number: 1013025566259

Date of advice: 1 June 2016

Ruling

Subject: ITAA 1997

Question 1

Are you a non-resident of Australia for tax purposes for the period 1 July 20XX to 30 June 20YY?

Answer

No

Question 2

Are you a non-resident of Australia for tax purposes from the date you departed Australia?

Answer

Yes

This ruling applies for the following periods:

1 July 20XX to 30 June 20YY

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You country of origin is Australia.

You are an Australian citizen and do not hold citizenship or have permanent residency with any other country.

You are married with adult children.

You left Australia with your spouse who commenced employment in a foreign country with the intention to remain overseas indefinitely.

You have been issued a foreign Residence visa which was arranged through your spouse's employer. The visas are issued for periods of up to two years at a time with renewal required for each subsequent period.

Your main residence has been rented to one of your children with a formal rental agreement in place and charged at the commercial rate of rent.

You have deregistered from the Electoral Roll.

You have cancelled your Australian private health insurance.

You are no longer a member of any clubs or organisations in Australia.

Ownership of your vehicles has been transferred to one of your children with the department of transport.

Ownership of your household and personal effects have been sold or given away.

You and your spouse hold two other Australian rental properties.

You have returned to Australia on two occasions or personal reasons. You inspected one of your rental properties on one visit.

You have secured rental accommodation in the foreign country and have lived in the same property with a long term lease agreement renewed every 12 months.

You have established service contracts in the foreign country, including mobile phone, electricity, internet and gas.

You have purchased a car and have obtained a drivers licence in the foreign country.

You and your spouse have established bank accounts and credit cards in the foreign country.

You and your spouse have joined several social clubs in the foreign country.

Your have an annual gym membership.

The Commonwealth superannuation test does not apply to you or your spouse.

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.

Based on the facts you have provided, we can conclude that you do not satisfy any of the tests of residency.

Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from the date you departed Australia.

You were a resident of Australia for tax purposes prior to your departure from Australia. You ceased being an Australian resident for tax purposes upon departure from Australia. You are entitled to a tax free threshold for the period you were a resident of Australia.