Edited version of private advice

Authorisation Number: 1052121846844

Date of advice: 25 May 2023

Ruling

Subject: Residency

Question

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

Answer

No.

This ruling applies for the following period:

Year ended 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

XX XXX 20XX

Relevant facts and circumstances

You are a single Australian citizen.

You were born in Australia and your parents and siblings reside in Australia.

You departed Australia on Date one to travel to Country A for an employment opportunity.

You have been in Country A on a visa since that time. This visa can be renewed an unlimited number of times.

The visa requires that you are coming to Country A solely to perform services in a specialty occupation.

You currently live in an apartment that you lease. You have a twelve-month lease which you have extended by six months.

The lease for this apartment commenced on XX XXX 20XX.

Most of your personal belongings are with you in Country A.

From XXX 20XX to XXX 20XX, you were employed by a company in Country A.

From XXX 20XX to the present, you have been employed by another company in Country A.

Your current and former employers in Country A sponsored your visa applications

You own an apartment in Australia (the Property), which is currently being rented.

You plan to retain the Apartment as an investment.

You have two bank accounts and one stock brokerage account outside of Australia.

You have the following assets remaining in Australia:

•         Active bank account

•         Inactive bank account (which has no funds and can't be accessed at present due to needing an Australian mobile phone number to do so )

•         Stock brokerage account

•         Mortgage for your property which is currently used to earn assessable income

•         Superannuation account

You have suspended your Australian private health insurance

You have updated your details in myGov.

You contacted the Australian Electoral Office to inform them of your overseas address and have enrolled as on Overseas Elector.

You participate in sporting activities in Country A.

You have developed many social connections in Country A.

You have a Higher Education Loan Program debt and a Student start-up loan debt, within Australia.

You only intend to travel to Australia for short periods of time in future income years.

Assumptions

For the income year ending 30 June 20XX, you plan to continue residing and working in Country A.

You may travel to Australia for short periods to holiday during that time.

Relevant legislative provisions

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

Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision

Question

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

Summary

Having considered your circumstances and the relevant factors, the Commissioner is satisfied that you are not a resident of Australia for income tax purposes from XX XXX 20XX to XX XXX 20XX.

Detailed reasoning

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 on and from XX XXX 20XX to XX XXX 20XX, you are not a resident of Australia.

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 in Australia. However, the Commissioner is satisfied that your permanent place of abode is outside Australia, in Country A. We considered the following factors in forming our conclusion:

•         You relocated to Country A on XX XXX 20XX to commence employment in a permanent position

•         You have obtained a visa which allows you to work in Country A for XX years in a specialty occupation

•         The visa may be extended an unlimited number of times

•         You have resided in the same accommodation in Country A since you arrived, which you arranged before leaving Australia

•         In Australia you have the Property, which is currently being rented, a stock brokerage account, an active bank account, an inactive bank account, a superannuation account, and a mortgage over the Property

•         In Country A, you have two bank accounts and one brokerage account and most of your personal belongings

•         You have developed many social connections since arriving in Country A and participate in multiple sporting activities and groups

•         You have not travelled to Australia since you arrived in Country A and;

•         You intend to travel to Australia for only short periods in future income years.

You were in Australia for 183 days or more during the income year ending 30 June 20XX. However, on or from XX XXX 20XX to 30 June 20XX:

•         The Property in Australia was rented and was not available to you.

•         You were staying in a leased apartment for a period of XX months, for which you have since extended the lease

•         Your settled lifestyle in Country A demonstrates that you do not have a usual place of abode in Australia and the Commissioner is satisfied that your usual place of abode has become the apartment; and

•         You did not have any intention to take up residence in Australia during this period.

You will not be in Australia for 183 days in the 20XX-XX income year and only intend on travelling to Australia for short trips in the 20XX-XX income year.

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

Therefore, you are not viewed as being a resident of Australia on and from XX XXX 20XX until 30 June 20XX.

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