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Edited version of your written advice
Authorisation Number: 1013038183695
Date of advice: 27 June 2016
Ruling
Subject: Residency
Question 1
Are you a resident for income tax purposes for the period 1 July 20XX to 30 June 20XX?
Answer
No.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
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 Australia.
You departed Australia 200X-0X income period.
You have stated that you have no intention to return to Australia. Your contract supports this statement.
During this time your family did not join you. This was because you were undergoing a separation from your spouse and are now divorced.
You are renting a unit under a long term lease outside of Australia.
You have no overseas assets apart from a bank account overseas.
You returned to Australia in the relevant income period to renew your passport, visit family, visit your children. During this visit you stayed with relatives. You have not returned to Australia since, this time.
You have X children who are of dependant age.
You do not have a permanent place to live in Australia.
You have no assets in Australia nor do you have any social or sporting connections in Australia.
You are not and have not been an employee of the Commonwealth Government of Australia.
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 and domicile tests
Based on the recent outcome of the Engineering Manager and Commissioner of Taxation [2014] AATA 969 (Engineering Manager) case the fact that you are estranged from your spouse is an important consideration.
In the case of the Engineering Manager, the taxpayer was found to be a non-resident for taxation purposes whilst working overseas with their family residing in Australia. The main factor in this was that the taxpayer was estranged from their spouse and it was not appropriate to consider the taxpayer as having a connection to Australia.
In your circumstances you own no assets in Australia and the only significant connection you have with Australia is your children who live with your ex-spouse. You have spent very little time in Australia since leaving the country and there is no evidence to suggest that you have resided or have a domicile in Australia.
In considering these facts and the decision of the Engineering Manager case it is accepted that you are not and will not be a resident of Australia for income tax purposes under the resides or 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.
Accordingly, you are not and 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.
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 and will not be a resident of Australia for income tax purposes under the superannuation test.
Your residency status
Accordingly for the period 1 July 20XX to 30 June 20XX 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.