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Edited version of your written advice
Authorisation Number: 1051213975146
Date of advice: 13 April 2017
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 2017
Year ended 30 June 2018
Year ended 30 June 2019
Year ended 30 June 2020
Year ended 30 June 2021
The scheme commenced on:
1 July 2016
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 Australia and Australia is your country of origin.
You and your family moved to country A on #.
It was your family's intention to live together in country A on a permanent basis.
You and your family resided in country A together for a period of time then your spouse and children returned to Australia due to your children's schooling needs which could not be met in country A. Your children had problems develop while attending school which could not be addressed in country A.
Your long term intention is for your family to reunite in country A and continue to live there together when circumstances permit.
You entered country A on a passport which allows you to work and reside there for 2 years and is renewable.
You have applied for a long term residential business visa.
You have ongoing employment in country A.
Your employer pays you an allowance for your accommodation in country A.
You have leased properties since your arrival in country A and your children attended school while they were there.
You currently have a lease on a property from # until #.
Prior to moving to country A you and your family lived in a family home owned by you and your spouse.
Your family home was rented out when you moved to country A.
You took all your household effects from Australia to country A.
You do not have plans to return to Australia to live.
Your assets in Australia include:
● Half share in a house that is listed for sale/rent
● Half share in a farming property
● Bank accounts
● Numerous shareholdings in local companies.
Your assets in country A include:
● Vehicle
● Bank accounts
● Household effects
Your spouse and children returned to Australia and live in a home owned by your spouse.
You have returned to Australia on a few occasions for work reasons since living in country A.
You have not advised Medicare or the Electoral Office that you are a foreign resident.
You and your spouse are not eligible to contribute to the relevant Commonwealth super fund.
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 and your family moved to country A on #.
It was your family's intention to live together in country A on a permanent basis.
You and your family resided in country A together for a period of time then your spouse and children returned to Australia due to your children's schooling needs which could not be met in country A.
Your long term intention is for your family to reunite in country A and continue to live there together when circumstances permit.
You entered country A on a passport which allows you to work and reside there for 2 years and is renewable.
You have applied for a long term residential business visa.
You have ongoing employment in country A.
Your employer pays you an allowance for your accommodation in country A.
You have leased properties since your arrival in country A and your children attended school while they were there.
Your spouse and children only returned to Australia because of unexpected problems developing when they attended school.
It was/is your intention to reside overseas indefinitely.
You were not residing in Australia according to ordinary concepts due to your ongoing employment, living arrangements and intention to remain living and working overseas indefinitely.
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 to 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 the Australia. Your domicile of choice was/is country A.
The Commissioner is satisfied that you had/have a permanent place of abode outside Australia for the following reasons:
You entered country A on a country A overseas employment pass which allows you to work and reside there for 2 years and is renewable.
You have applied for a long term residential business visa.
You and your family's personal effects were taken with you overseas.
You currently have a lease on a property from # until #.
You do not have plans to return to Australia to live.
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 and do not intend to be in Australia for more than 183 days in any of the applicable financial years.
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.