Edited version of private advice

Authorisation Number: 1052055030161

Date of advice: 14 December 2022

Ruling

Subject: Residency

Question

Are you an Australian tax resident for the 20XX and 20XX income tax years?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You were born in Country A.

You hold a Country B passport.

You are a citizen of Country A and Country B. You are not a citizen of any other country.

You are not a permanent resident of any other country.

You entered Australia in a working holiday (subclass 462) visa on XX May 20XX.

You arrived in Location 1 and obtained employment and worked for X months.

You then moved to Location 2 and worked on a farm for X months.

You then moved back to Location 1, continued to work and you have been living there since June 20XX.

List of accommodation since arriving in Australia;

You obtained a bridging visa on XX May 20XX

You obtained a partner (subclass 820) visa on the XX February 20XX.

You have a permanent full-time job in Location 1.

You were outside Australia when you went to Country 1 and Country 2 to visit family and friends from XXof May to XX of June 20XX

You intend to reside in Australia permanently.

You have not had income sourced outside of Australia.

You never lodged a foreign tax return whilst living in Australia.

You have a bank account that is held in the Country C.

You have an Australian bank account.

Your intention is only to depart Australia for a period up to 3 or 4 weeks to visit family in Country A and Country B.

You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976.

You are not an eligible member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990.

You do not have a spouse or a child under 16 who is a member of PSS or an eligible employee in respect of the CSS.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 subsection 995-1(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 Draft Taxation Ruling TR 2022/D2 Income tax: residency tests for individuals.

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, in the 20XX and 20XX income tax years, you are a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are a resident of Australia according to ordinary concepts.

We also consider that your domicile is not in Australia as:

•         You have not obtained permanent residency status.

You were in Australia for 183 days or more during the 2022 income tax year, will be in Australia for more than 183 days in the 2023 income tax year and the Commissioner is not satisfied that both:

•         your usual place of abode is outside Australia, and

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

We considered the following factors in forming our conclusion:

•         You arrived in Australia on XX May 20XX on a working holiday visa.

•         You have only left Australia to visit family.

•         You have long term employment in Australia.

•         You obtained for a bridging visa on XX May 20XX.

•         You obtained for a Partner (subclass 820) visa on XX February 20XX.

•         You have accommodation in Australia.

•         You intend to stay in Australia permanently.

•         Your movements and habits were consistent with having a settled routine in Australia.

You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test.

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