Edited version of private advice

Authorisation Number: 1051572049190

Date of advice: 27 August 2019

Ruling

Subject: Residency

Question

Are you a resident of Australia for income tax purposes?

Answer

No

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You are a citizen of Australia.

You commenced your employment with your employer in City A in the 20XX income year, having spent the previous four years outside of Australia on assignment with another organisation.

You acted as the Interim Chief Executive Officer of your employer since X September XXX , and commenced an assignment in Country Y from this date, whereby you worked on a rotational basis in both Australia and Country Y.

It was your intention at that time of taking the permanent Chief Executive Officer role in 20XX, to remain in Country Y for at least XX years.

You have remained living in Country Y since this time and you intend to remain there indefinitely.

You have taken over the lease of the property supplied by your employer in Country Y and pay all costs associated with this property in Country Y.

You and your spouse have separated.

You financially support your spouse and X of your X children.

You will continue to provide support to your spouse and children until a settlement has been reached.

Your spouse and children live in your family home in Australia.

The family home will remain with your spouse as part of the separation settlement.

You have a car which is housed at your parents' house and is used by them when you are not in Australia.

You own a yacht with your sibling which is currently for sale.

You have a property in Australia which is used by you and your family for holidays which will form part of your separation settlement.

You stay with your parents when you are in Australia.

You have arranged for your mail to be redirected to Country Y.

You have removed your name from the Australian electoral roll.

You maintain Australian health cover for your spouse and children.

You and your spouse are not eligible to contribute to the PSS or the CSS super 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.

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.