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Edited version of your written advice
Authorisation Number: 1051305702264
Date of advice: 7 November 2017
Ruling
Subject: Taxation of income received under a scholarship
Question and answer
Are you a resident for tax purposes?
No.
This ruling applies for the following period:
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
The scheme commences on:
1 July 2016
Relevant facts and circumstances
You left Country A in 20XX and your spouse accompanied you
You entered Country B on a work visa and hold a Country B residence permit
You own a number of properties in Country A and receive rental income from them
Existing household furniture and effects have been sold
You have adult children in Country A
The banks have been advised of the move and you continue to maintain the bank accounts in Country A
You have notified your health insurance provider of your relocation
You do not have any other connections to Country A and have been removed from the electoral role
The employment in Country B is expected to be completed in 20XX
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 will 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.
ATO view documents
Taxation Ruling TR 98/17 – Income tax: residency status of individuals entering Australia
Taxation Ruling IT 2650 – Income tax: residency – permanent place of abode outside Australia
Taxation Ruling IT 2650A (Addendum) – Income tax: residency – permanent place of abode outside Australia
Other references (Non ATO view – example court cases, etc):
Macquarie Dictionary, , version 5.0.0, 1/10/01
Dempsey and Commissioner of Taxation AATA 335 (29 May 2014)
Federal Commissioner of Taxation v Miller HCA 23; (1946) 73 CLR 93.
Levene v Inland Revenue Commissioners UKHL 1; AC 217.
Applegate v Federal Commissioner of Taxation 1 NSWLR 126