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Edited version of your written advice
Authorisation Number: 1013097554234
Date of advice: 26 September 2016
Ruling
Subject: Residency
Question and answer
Are you a resident of Australia for taxation purposes from when you left Australia?
No.
This ruling applies for the following periods:
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ended 30 June 200X
Year ending 30 June 200X
Year ending 30 June 200X
Year ending 30 June 200X
Year ending 30 June 200X
The scheme commenced on:
The scheme has commenced
Relevant facts and circumstances
You were born in Australia and you are a citizen of Australia.
You went overseas a number of years ago to work.
You initially were working in country Y during the 200X and 200X income years and you went to country Z in the 200X where you have remained.
You live in employer provided accommodation which is for your sole use.
You will not return to Australia on a permanent basis in the foreseeable future.
You met your spouse overseas and were married in Australia.
Your spouse is a citizen of Country X.
You and your spouse have had a child since you commenced living in Country Z.
Your child is a citizen of Country X.
You have a rental property in Australia along with a bank account.
You have a bank account in country Z.
Your parents live in Australia.
You return to Australia for visits and have not exceeded 183 days since leaving Australia and you will not exceed 183 days in Australia for any financial year in the future.
You and your spouse are not eligible to contribute to the relevant Commonwealth Government Superannuation funds.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1936 Subsection 6(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 went overseas to work in the 200X income year.
You have been living and working in Country Y and country Z since leaving Australia.
You do not intend on returning to Australia to live in the foreseeable future.
Since leaving Australia you have married and had a child.
Based on the facts above you have not maintained a connection to Australia according to ordinary concepts.
You are not a resident under this test.
The domicile test
If a person's domicile is Australia they will be 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.
Your domicile of origin is Australia.
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.
The Commissioner is satisfied that you have set up a permanent place of abode outside Australia for the following reasons:
• You have been living and working outside Australia for a number of years
• You have been living in Country Z in employer provided accommodation with your family for a number of years
• You do not intend on returning to Australia to live in the foreseeable future
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 have not been in Australia for more than 183 days since leaving Australia.
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.
Your residency status
You are not a resident of Australia for taxation purposes.