Edited version of private advice

Authorisation Number: 1051680906217

Date of advice: 18 May 2020

Ruling

Subject: Residency - departing Australia

Question

Are you a resident of Australia for taxation purposes from XX XXXX 2019?

Answer

No. Having considered your circumstances as a whole and the residency tests, it is accepted that you are not a resident of Australia for income tax purposes from XX XXXX 2019. Further information on residency can be found by searching 'QC 33232' on ato.gov.au

This ruling applies for the following period:

30 June 2020

The scheme commences on:

1 July 2019

Relevant facts and circumstances

You are a citizen of Country X and Australia.

You moved to Australia in 2013 with your spouse from Country X.

Your employer is based in County X, and had been progressing towards expansion into the Country Y market.

Your employer asked you to consider moving to that region to provide better support to the business there, and also improve communication with Country X due to the closer time difference.

While it was not compulsory for your employment, you were provided with an opportunity to start your own business in Country Z, which was agreed to by your Country X employer.

You and your spouse departed Australia with all of your key belongings in Summer 2019.

You intended to leave for an indefinite period of time, of at least five years. You state it is likely you will return to Country X at some point.

When you left, you planned to return to Australia only briefly in Autumn 2020 in order to arrange for the sale of your residential property, pack up and take the last of their belongings and sell your second car. Due to COVID-19 restrictions, this return trip has been put on hold until around Spring 2020.

Preparations for your relocation started some time previously, with your spouse giving up their Australian employment in late 2018, however it then took longer than expected to finalise where you were going and to complete all the necessary paperwork.

In 2019, your spouse gave up their involvement in a local club. You both were involved with a charity, which stopped in mid-late 2019.

Your spouse gave up their Australian mobile number.

You and your spouse do not have family in Australia.

You and your spouse have suspended your private health membership for four years. It was advised it was not wise to cancel it outright until being sure they could be covered in the Country Z, and also if case circumstances changed, it was better to keep registered for as long as possible rather than having to reapply.

You and your spouse's main car was shipped to Country Z with you late 2019. You have one other car. You had planned to sell that car close to departure, but as it developed a serious mechanical fault about two weeks before you left, it wasn't practical to have it fixed and sell it within the timeframe you had. In the end it was useful for you to have the car right up until your departure, and you now plan to use it briefly when you return to arrange the sale of the house and collect your final belongings. You will then sell the car.

The only remaining things in Australia are the car, the house you own with your spouse and some goods within the house.

·   You had several reasons for not selling your property prior to leaving.

·   Unknown amount of time until you knew when the paperwork for Country Z would come through.

·   The logistics of dealing with shipping goods to an unknown accommodation meant it was more viable to wait to make some decisions on how many items of furniture and other belongings they wither would sell in Australia or ship over to keep.

·   More sensible choice logistically, and in the expectation of improving value would be to rent the house for a while and dispose of it when we could. You booked flights to Australia for Autumn 2020 to do that - the recent COVID-19 issues have changed your travel options.

You and your spouse decided to rent the house furnished for up to one year. You preferred being able to leave some of their personal effects in your house, plus a car in the garage, and to have the option to sell the house. This meant tenants would need to accept that a couple of rooms could not be used, there may be viewings for prospective buyers and the option that the house could be sold meaning they would be asked to leave during the term with as much notice as could be given. They were not ideal market conditions, so you rented the house privately at a reduced rate for up to one year with those provisions in place.

You and your spouse have retained your banking in Australia in order to service the ongoing needs of the house and mortgage. You will close this in due course.

You and your spouse have made an investment of $X in your relocation which included costs on travel, business, accommodation, shipping and duties.

You have established a company in Country Z including contracting serviced offices for an initial 3 year term and appointing a corporate services law firm for services and registered offices.

You have a work/residency permit there for five years starting in Summer 2019. This is extendable to seven years at which point permanent residency can be sought.

Your spouse accompanies you and is not permitted to work.

You and your spouse have been in rented accommodation since arriving, and have taken out longer term 10 month lease from Autumn 2020.

You live in a fully furnished townhouse in Country Z in a gated community.

You and your spouse hope to be in a position to possibly buy a property in early 2021, the earliest you can as they need at least six months of banking history there.

You and your spouse have established a bank account in Country Z.

Your spouse has begun volunteering work in Country Z

You and your spouse obtained Country Z driving licenses.

You and your spouse did not maintain any professional or occupational membership in Australia.

You and your spouse are also selling your house in Country X which has been rented out for the past few years. When you obtained possession in Spring 2019, it required a lot of renovation to be made marketable. The work was due to be completed in Autumn 2020 and the house will go the market soon as you can arrange it thereafter.

You and your spouse informed the Australian Electoral Commission that you were departing Australia.

You and your spouse are not members of the Public Sector Superannuation Scheme or an eligible employee in respect of the Commonwealth Superannuation Scheme

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 995-1(1)

Income Tax Assessment Act 1936 Subsection 6(1)