Edited version of private advice

Authorisation Number: 1051677354809

Date of advice: 14 May 2020

Ruling

Subject: Residency

Question

Were you a resident of Australia for income tax purposes while you were living and working overseas?

Answer

No. Having considered your circumstances as a whole and the residency tests, it is accepted that you were not a resident of Australia for income tax purposes for the period of the ruling and you are not, therefore, assessable on your foreign income. Further information on residency can be found by searching 'QC 33232' on ato.gov.au

This ruling applies for the following period:

X March 2018 to X July 2019

The scheme commences on:

March 2018

Relevant facts and circumstances

You were born in Australia.

You are professional sportsperson.

You hold Australian and a foreign country A passport because your parents were born in foreign country A and you obtained the foreign passport because it would potentially open doors in your line of work.

You believe you have permanent residency status in foreign country A due to your parents being born there and they registered your birth with the foreign country's government.

You are married and have a family.

Leading up to your relocation to foreign country B, your agent contacted the eventual employer (the Club) and asked if they were interested in you, they came to watch you play, they liked you, you had a meeting with their general manager and they signed you to a XX-year contract.

You departed Australia to take up the contract to play professionally in foreign country B with the Club. You returned to Australia in mid 20XX. This is the period of the ruling

You were newly married at the time and your spouse later resigned from their job in Australia and joined you in foreign country B, departing Australia.

You and your spouse entered foreign country B using visas supplied by your foreign employer. The visa entitled you to work and live in foreign country B. It lasted for X year as foreign country B only provides a fixed period and you had to renew it while there.

You have not sought advice from the tax authority in foreign country B as it was your understanding that your foreign employer would withhold the necessary tax from your pay. You believe would be classified by them as a non-permanent resident.

Prior to your relocation to foreign country B you were playing for an Australian club.

A professional sports person's playing career is relatively short as compared to a finance professional, for example. It is therefore in the player's best interests that their managing agent seeks out opportunities that can enable the player to maximise their professional career along with their playing remuneration.

Not all went to plan. Your spouse fell pregnant whilst overseas and you both made the decision to return to Australia as your family are located here. You came back to Australia and moved back in with your parents. Your baby was born.

When completing incoming and outgoing passenger cards you stated that you are an Australian citizen entering temporarily and your country of residence being foreign country B; though you are not completely sure.

You lodged a tax return through your accountant in Australia for the 20XX income year. On this tax return you stated that you were a resident for Australian tax purposes. However, there should have been a pro-rata for your residency stating that you left Australia and became a non-resident for tax purposes. This will be amended pending the results of this private ruling application.

During your time overseas you visited Australia on occasions for short visits:

During visits back to Australia you stayed with your parents.

You and your spouse are not members of a Commonwealth superannuation scheme

During your time overseas, you and spouses' important mail was sent to the foreign country B address. Regular mail was sent to your parent's residence.

Accommodation

You and your spouse were living with your parents in Australia prior to your departure.

The foreign country B employer leased an apartment for you to reside in during your stay in.

Assets

You and your spouse own a residential rental property in Australia. This property has never been occupied by you as your main residence and was leased during your overseas absence.

As you lived with your parents prior to leaving for foreign country B, the only household goods you owned were some furniture. Theses remained at your parents' home; as did your personal effects.

The Australian sourced income you received while you lived in foreign country B was from:

• your rental property;
• interest from your bank account;
• income from your previous Australian employer.

While in foreign country B, you have maintained Australian bank accounts but rarely used them. Your foreign salary was paid into a foreign currency bank account and playing bonuses were paid into a foreign country B account.

You did not make any investments while you were overseas.

You inadvertently neglected to advise the banks of your overseas posting as you were unaware you were required to do this.

You cancelled your Australian private health insurance policy.

You inadvertently neglected to advise various authorities such as Medicare. However, you did remove yourself from the Australian electoral role.

You twice obtained an international driving licence.

Social and sporting connections

While in foreign country B, you did not maintain any professional, social or sporting connections with Australia.

While in foreign country B, you established professional and sporting connections with the Club as a sports professional.

You maintained professional and occupational memberships in Australia with your union membership.

Employment

You had a X-year contract in foreign country B with the Club.

You did not have a job being held for you while you were in foreign country B.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Income Tax Assessment Act 1997 Section 6-5