| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051368476592
Date of advice: 14 May 2018
Ruling
Subject: Residency
Question
Will you be an Australian resident for tax purposes?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You are a dual citizen of Country X and Australia.
You have lived in Country Y since 20XX.
You and your spouse jointly own a property in Country Y where you live.
You and your spouse jointly own a property in Australia where your spouse lives.
You are employed by a foreign financial institution and will retire during the 2019 income year.
You plan to make several visits to Australia.
You will not take up any paid work in Australia during this period.
Your only Australian sourced income is bank interest.
You intend to be in Australia for less than 183 days.
You select ‘visitor’ on immigration passenger cards and state that your country of residence is Country Y.
Your personal effects and most household effects were sent to Country Y.
You have bank accounts, a car, and numerous established professional, sporting and social ties in Country Y.
You notified the Australian Electoral Commission to remove you from the electoral roll in 20XX.
You have not been eligible for Medicare since 20XX.
You and your spouse are not eligible employees under the Public Sector Superannuation Scheme or Commonwealth Superannuation Scheme.
Relevant legislative provisions
Income Tax Assessment Act 1936 subsection 6(1)
Reasons for decision
Residency for taxation purposes
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
● superannuation test.
If any one of the tests is met, an individual will be a resident of Australia for taxation purposes. The primary test for deciding the residency status of an 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 will have been established.
The resides (ordinary concepts) test
Taxation Ruling IT 2650 Income Tax: Residency – permanent place of abode outside Australia emphasises the intended and actual length of the individual's stay in an overseas country, any intention to return to Australia, the establishment or abandonment of any residence, and the durability of association that the individual maintains with a particular place as the main factors to be considered when determining the residency status of individuals leaving Australia.
You are not considered to be a resident of Australia under the resides test.
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.
Based on the facts provided, we consider that you will not be a resident of Australia under the domicile test as you have a permanent place of abode outside Australia.
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 do not spend more than 183 days in Australia each year and therefore you do not meet the 183 days test.
You and your spouse are not eligible to contribute to the relevant Commonwealth superannuation funds.
You will not be treated as a resident under the superannuation test.
Your residency status
As you do not satisfy any of the four tests of residency outlined in subsection 6(1) of the ITAA 1936, you will not be a resident of Australia for income tax purposes for the year ended 30 June 2019.