Edited version of private advice

Authorisation Number: 1052029267463

Date of advice: 6 September 2022

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You were born in Australia.

You are a citizen of Australia.

You departed Australia several years ago to take up a position in Country Z for your employer in the Country Z office.

This position was for a number of years and has been extended for a period of time.

You reside in Country Z on a work visa.

Your family accompanied you to Country Z.

Your family have now returned to Australia and have been living in Australia for several months.

You returned to Australia with your family to assist with the move back to Australia.

As a result of travel restrictions you were not able to return to Country Z for a few months.

You did not intend on being in Australia for this length of time.

It is your intention to be in Country Z to complete your employment contract.

You rented a property in Country Z for you and your family to live in.

Now that your family have moved back to Australia you rent a smaller apartment for yourself.

You came back to Australia and it was your intention to be in Australia for a short period of time. Due to further restrictions your departure date was a few weeks later than intended.

You pay tax in Country Z on your salary.

You are paid into an Australian bank account.

Your family home in Australia was rented out for a few years until your family moved back into the family home.

You have limited investments in Australia, your family home, rental properties and a motor vehicle.

You have a trading account in Country Z as part of an employee share scheme program and you maintain a Country Z bank account.

You advised both the Electoral Commission and Medicare that you were leaving Australia to live overseas.

You have been lodging returns in Australia as a non-resident of Australia for taxation purposes since leaving Australia.

Neither you nor your spouse are eligible to contribute to the PSS or the CSS super funds.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 6(1)

Reasons for decision

For tax purposes, whether you are a resident of Australia is defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).

The definition has four tests to determine your residency for income tax purposes. These tests are:

•         the resides test

•         the domicile test

•         the 183 day test, and

•         the Commonwealth superannuation fund test.

It is sufficient for you to be a resident under one of these tests to be a resident for tax purposes. Our interpretation of the law in respect of residency is set out in:

Taxation Ruling IT 2650 Income tax: residency - permanent place of abode

Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.

The resides test

The resides test is the primary test of tax residency for an individual. If you reside in Australia according to the ordinary meaning of the word resides, you are considered an Australian resident for tax purposes.

Some of the factors that can be used to determine whether you reside in Australia include:

•         period of physical presence in Australia

•         intention or purpose of presence

•         behaviour while in Australia

•         family and business/employment ties

•         maintenance and location of assets

•         social and living arrangements.

No single factor is decisive, and the weight given to each factor depends on your specific circumstances. Where an individual does not reside in Australia according to ordinary concepts, they will still be an Australian resident if they meet the conditions of one of the other tests.

The domicile test

Under the domicile test, if your domicile is in Australia, you are a resident of Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia.

Whether your domicile is Australia is determined by the Domicile Act 1982 and the common law rules on domicile. For example, you may have a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).

Whether your permanent place of abode is outside Australia is a question of fact to be determined in light of all the facts and circumstances of each case.

Key considerations in determining whether you have your permanent place of abode outside Australia are:

•         whether you have definitely abandoned, in a permanent way, living in Australia

•         length of overseas stay

•         nature of accommodation, and

•         durability of association

The 183-day test

Under the 183 day test, if you are present in Australia for 183 days or more during the income year, you will be a resident, unless the Commissioner is satisfied that both:

•         your usual place of abode is outside Australia, and

•         you do not intend to take up residence in Australia.

The question of usual place of abode is a question of fact and generally means the abode customarily or commonly used by you when are physically in a country.

The Commonwealth superannuation test

An individual is a resident of Australia if they are either a member of the superannuation scheme established by deed under the Superannuation Act 1990 or an eligible employee for the purposes of the Superannuation Act 1976, or they are the spouse, or the child under 16, of such a person.

Application to your circumstances

We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that, for the relevant period of time you are not a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are not a resident of Australia according to ordinary concepts.

We also consider that your domicile is not in Australia and the Commissioner is satisfied that your permanent place of abode is outside Australia. We considered the following factors in forming our conclusion:

•         You are working and living in Country Z until your work ends.

•         Your family moved back to Australia.

•         You accompanied them to Australia to get them settled.

•         You were initially required to stay longer than planned due to Country Z Covid restrictions.

•         You did not intend on being in Australia on a permanent basis.

•         You made another return visit to Australia to see your family.

Application to your circumstances

We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that, for the relevant period you are not a resident of Australia for taxation purposes.

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