1 For the purpose of determining whether you are a resident of Australia within the meaning of the definition of 'resident' in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936), did you 'reside' in Australia at any time during the period from 1 July 20XX to 30 June 20XX?
No. Question 2 For the purpose of determining whether you are a resident of Australia under subparagraph (a)(i) of the definition of 'resident' in subsection 6(1) of the ITAA 1936, is the Commissioner satisfied that your permanent place of abode was outside Australia for the period from 1 July 20XX to 30 June 20XX? Answer Yes. This ruling applies for the following period: Year ended 30 June 20XX The scheme commences on: Year ended 30 June 20XX
You are an Australian citizen who is, and continues to be domiciled in Australia. You are neither an eligible employee for the purposes of the Superannuation Act 1976 nor a member of the superannuation scheme established by deed under the Superannuation Act 1990 . You are also not the spouse of such a person. In the year ended 30 June 20XX, you departed Australia with the intention to move overseas for the foreseeable future, with no fixed date of return to Australia, but with a general intention to one day return to Australia to live. You declared yourself to be an Australian departing permanently on your Australian immigration card. Around this time, you also terminated the lease over your Australian residence, cancelled various Australian memberships, reduced your Australian business activities, notified various organisations and authorities of your change in residence, and updated your postal address. You have family located in Australia and Country Z. You undertake business activities in Country Z. You had and continue to have a residence available for your use in Country Z. You did not visit Australia during the ruling period.
Income Tax Assessment Act 1936 - Section 6
Question 1 The statutory definition of resident is set out in subsection 6(1) of the ITAA 1936 and consists of four tests. Relevantly, the 'residency according to ordinary concepts' or the 'ordinarily resides' test provides that ' resident or resident of Australia means: (a) a person, other than a company, who resides in Australia ...'. Where a person resides in Australia under ordinary concepts, Australian residency is established and the other tests need not be considered: FCT v Applegate 79 ATC 4307; (1979) 9 ATR 899; paragraph 12 of Taxation Ruling TR 98/17 Income Tax: residency status of individuals entering Australia (TR 98/17). Whether a person is a resident of Australia is a question of fact and degree to be determined having regard to the circumstances of the particular case. As there is no definition of the word 'reside' in Australian income tax law, the ordinary meaning of the word must be considered. The Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time', and the Shorter Oxford English Dictionary
defines it as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place'. Paragraph 18 of TR 98/17 states that the period of an individual's physical presence in Australia is not, by itself, decisive. Instead, an individual's behaviour over the time spent in Australia should be examined to see if it reflects a degree of continuity, routine or habit that is consistent with residing in Australia. Paragraphs 20 to 21 of TR 98/17 state that all the facts and circumstances that describe an individual's behaviour in Australia are relevant, and no individual factor is necessarily decisive, but that the following factors will be particularly useful: • intention or purpose of presence; • family and business/employment ties; • maintenance and location of assets; and • social and living arrangements. In Hafza v Director-General of Social Security (1985) 6 FCR 444 ( Hafza ) at 449-450, Wilcox J discussed the concept of residency in relation to legislation which had incorporated the 'residency' definition from the ITAA 1936:
Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 236. It is important to observe firstly, that a person may simultaneously be a resident in more than one place - see the facts of Lysaght
(supra) and the reference by Williams J to "a home or homes" - and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained. In Hafza, Wilcox J stated that a lack of physical presence in a particular place does not necessarily lead to a conclusion that a person has ceased to be resident there. Rather, His Honour stated that the relevant test is whether the person has retained a 'continuity of association', an intention to return, and an attitude that the place remains 'home'. In Harding v FCT [2018] FCA 837 ( Harding ), Derrington J discussed the use of a 'checklist' of relevant factors that had been developed in the AAT through analysis of various residency decisions, such as in Re Iyengar v FCT
(2011) 85 ATR 924 and Re Sneddon v FCT (2012) 89 ATR 739, and stated at [46] that: Those decisions identified a number of topics relevant to the ascertaining of a person's residence in Australia such as the person's physical presence in Australia, their nationality, the history of their past residence and movements, their mode of life and habits, the frequency, regularity and duration of visits to Australia, their purpose for visiting or leaving Australia, the remaining family and business ties with Australia in comparison to any other foreign country and the maintenance of the place of abode. His Honour noted at [46] that: However, these factors do not constitute some kind of rigid formula for the determination of whether a person is a resident . They do not each invariably apply in all cases. They are merely the constitutive indicators or objective facts which are frequently relevant to the determination of the nature and quality of a person's presence in or association with a particular location
. A consideration of those objective matters will also reflect the actual state of mind of the person in question concerning their intention to treat a place as their home. [Emphasis added.] Although the decision in Harding was the subject of a successful appeal in Harding v FCT [2019] FCAFC 29 ( Harding Full Court ), the majority of the Full Federal Court accepted Derrington J's conclusion in respect of the 'ordinarily resides' test. In assessing the question of residence, it is therefore useful to consider the factors that have been identified as relevant by the courts and Tribunal, and which have been set out by the Commissioner in paragraphs 20 to 21 of TR 98/17. Although residency is a matter to be determined on a year by year basis, events that occurred outside the period in question are also relevant in determining the nature and quality of a person's association with Australia. Having considered the totality of the facts as presented, we do not consider that you have retained a continuity of association with Australia such that you can be said to reside in Australia under the 'ordinarily resides' test.
You are therefore not considered to be a resident of Australia for the purposes of the 'ordinarily resides test' for the year ended 30 June 20XX. Question 2 The second test of residency in subsection 6(1) of the ITAA 1936 (the 'domicile test') provides that: " resident or resident of Australia " means: (a) a person, other than a company, who resides in Australia and includes a person: (i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia; ... Your domicile was in Australia throughout the ruling period. You will therefore be a resident of Australia for the year ended 30 June 20XX unless the Commissioner is satisfied that you had a permanent place of abode outside Australia. The Commissioner is satisfied that your permanent place of abode was outside Australia for the year ended 30 June 20XX for the purposes of determining whether you were a resident of Australia under subparagraph (a)(i) of the definition of 'resident' in subsection 6(1) of the ITAA 1936.