Edited version of private advice

Authorisation Number: 1052119221599

Date of advice: 18 May 2023

Ruling

Subject: Residency

Question

Am I an Australian resident for taxation purposes for the period XX XXXX 20XX to XX XXXX 20XX?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You have been a foreign resident of Australia for taxation purposes from 20XX to 20XX.

Your country of origin is COUNTRY A; however you are a dual citizen of Australia and COUNTRY A.

You own a townhouse in COUNTRY A.

You arrived in Australia with your family on XX XXXX 20XX. You intend to return on XX XXXX 20XX and have already booked return tickets to COUNTRY A.

Prior to your arrival in Australia, you lived in COUNTRY A.

You are living in your investment property in Australia which was purchased in 19XX. The property is normally rented out and you have informed your property manager to put the property on the rental market in XXXX 20XX, following your return to COUNTRY A.

You did not bring any of your personal or household effects from COUNTRY A and are borrowing furniture for the investment property.

You own a vehicle in Australia that is not registered and that you intend to sell before returning to COUNTRY A.

Your banking has and will continue to be conducted through banks in COUNTRY A.

You do not have any social or sporting connections to Australia apart from family. You maintain social connections with your family and friends in COUNTRY A.

Your de facto partner holds a permanent residence visa that was issued in 20XX. They are undertaking an exchange semester in Australia between XXXX 20XX and XXXX 20XX; however they are enrolled at a university in COUNTRY A where they will continue their studies after they return to COUNTRY A.

Your de facto partner receives a study stipend from COUNTRY A and has no employment income in Australia.

You undertook some remote work connected to your COUNTRY A employer in Australia for several weeks.

One of your children is attending kindergarten in Australia and receives a subsidy from the relevant State and a childcare subsidy. You have informed the relevant agency that you and your family are foreign residents for tax purposes.

You applied for both your children to resume and start kindergarten in COUNTRY A in XXXX 20XX.

Neither you nor your de facto partner are eligible to contribute to the PSS or the CSS Commonwealth super funds.

Relevant legislative provisions

Subsection 6(1) of the Income Tax Assessment Act 1936

Reasons for decision

Overview of the law

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, for the period XX XXXX 20XX to XX XXXX 20XX 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 arrived in Australia with your family on XX XXXX 20XX

•         You intend on returning to COUNTRY A on XX XXXX 20XX and have already booked plane tickets.

•         The purpose of your travel to Australia was to spend time with your Australian family while you are taking paternity leave and while your de facto partner is doing an exchange semester at an Australian university.

•         Apart from a short employment stint in Australia that was connected to your COUNTRY A employer, you have no employment in Australia.

•         You have no social or sporting connections to Australia.

•         You own a property in COUNTRY A.

•         You also own a property in Australia however it is usually rented. You intend to live in this property and undertake repairs of the property before departing to COUNTRY A.

•         You did not bring any of your personal or household effects from COUNTRY A and are borrowing furniture for the property.

You will be in Australia for 183 days or more during the 20XX income year and 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.

We considered the following factors in forming our conclusion:

•         Your country of origin is COUNTRY A; however you are a dual citizen of Australia and COUNTRY A.

•         You own property in COUNTRY A.

•         Whilst in Australia, you are living in your investment property. The property is normally rented out and you have informed your property manager to put the property on the rental market, following your return to COUNTRY A.

•         You did not bring any of your personal or household effects from Norway and are borrowing furniture for the investment property.

•         The purpose of your travel to Australia was to spend time with your Australian family while you are taking paternity leave and while your de facto partner is doing an exchange semester at an Australian University.

•         You intend to leave Australia and return to COUNTRY A on XX XXXX 20XX and have already booked return tickets.

•         You maintain social connections with friends and family in COUNTRY A.

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

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