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Edited version of your written advice
Authorisation Number: 1051203617193
Date of advice: 17 March 2017
Ruling
Subject: Residency
Question and answer
Are you an Australian resident for tax purposes for the year ended 30 June 2016?
Yes.
This ruling applies for the following periods:
Year ended 30 June 20YY
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are a citizen of Country X.
Your Country X assets includes an apartment.
Your Country X apartment has been rented while you have been in Australia.
You were renting your living arrangements in the Country X.
You arrived in Australia in mid 20WW.
You were granted entry to Australia on a visa, which allows you to stay from mid 20WW until mid 20ZZ.
You have not begun the process of applying for permanent residency in Australia, but you intend to.
Your original purpose to Australia was to work.
You left Australia to return to Country X for X trips in aggregate of XY days during the 20YY financial year. In mid 20XX and late 20XX.
You were employed at Company A from mid 20WW until early 20YY.
You have been employed at Company B since early 20YY.
You lived in rental accommodation from late until mid 20YY.
You have been living with your partner in rental accommodation since mid 20YY.
You met your partner in Australia, who is an Australian citizen.
You own a car in Australia.
You have lodged your 20XX and 20YY financial year Australian income tax returns as a resident of Australia.
You contribute to an Australian superannuation fund.
You are not a member of the Public Service Superannuation Scheme or the Commonwealth Superannuation Scheme.
You do not still have a position or job held in Country X.
You are not receiving income from the Country X.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
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 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are:
● the resides test,
● the domicile test,
● the 183 day test, and
● the superannuation test.
The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests.
1. 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, it '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'.
Taxation Ruling TR 98/17 Income Tax: residency status of individuals entering Australia emphasises that the quality and character of an individual's behaviour while in Australia assists in determining whether the individual resides here.
All the facts and circumstances that describe an individual's behaviour in Australia are relevant. In particular, the following factors are useful in describing the quality and character of an individual's behaviour:
● intention or purpose of presence
● family and business/employment ties
● maintenance and location of assets, and
● social and living arrangements
No single factor is necessarily decisive and many are interrelated. The weight given to each factors varies depending on individual circumstances.
In your case:
● your Country X assets includes an apartment being rented while you have been in Australia
● you entered Australia on a visa, which allows you to stay for a period of X years from mid 20WW until mid 20ZZ
● you have not begun applying for Australian permanent residency, however you intend to do so
● you left Australia to return to Country X for X trips in aggregate of XY days during the 20YY financial year
● you live in rental accommodation with your partner, who you met in Australia and is an Australian citizen
● you were employed at Company A from mid 20WW until early 20YY
● you have been employed at Company B since early 20YY
● you do not still have a position or job held in Country X
● you are not receiving income from Country X
As you entered Australia to work, intend to stay in Australia and maintained consistent living arrangements you are residing in Australia under this test for the year ending 30 June 20YY.
Your residency status
As you meet the resides test for the year ending 30 June 20YY, you are a resident of Australia for tax purposes.
As you are a resident of Australia, according to section 6-5 of the ITAA 1997, your assessable income includes income gained from all sources, whether in or out of Australia.