Edited version of private advice

Authorisation Number: 1052161786370

Date of advice: 28 August 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes for the relevant period?

Answer

No.

This ruling applies for the following period:

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

Your country of origin is Country Z.

You currently hold a Country Y passport.

You are in the process of reapplying for a Country X passport.

You resided in Country Y for a number of years.

You lived with your spouse and children.

From a period starting several months ago, you have resided in Australia where you have been working.

Your spouse and child remained in Country Y due to delays in having permits issued.

Your spouse and child are citizens of Country Y and also hold Australian passports.

You hold an Australian visa allowing you to stay and work in Australia.

Your spouse and child intend on travelling to Australia later this year.

The purpose of your spouse relocating to Australia is to meet the residency criteria to enable your child to apply for an Australian passport.

You have received a job offer from your former employer in Country Y, Employer Z.

It will require you to reside in Country Y for the duration of the contract.

The contract is for a number of years with a renewal opportunity for further years.

You plan to depart Australia and return to a Country on or around DD MM 20XX

You own a property in Country Y, which you acquired in several years ago.

The property has never been lived in, however, due to you having always taken up the option of employer provided accommodation when working in Country Y.

The property has never been rented and has always been available at any time for you and your family to reside in if you chose to no longer accept the offer of employer provided accommodation.

Due to your links with Country Y, and despite you having left Country Y to travel to and work in Australia, Employer Z has allowed your spouse and child to continue to reside in the same accommodation they have lived in for years.

You intend to reside in this same property on your return to Country Y.

You do not own any property in Australia and have been renting a property the entire time you have been in Australia.

Your personal and household effects have remained in Country Y.

Your only Australian assets are bank accounts and superannuation.

You have no sporting or social connections in Australia.

You have social connections in Country Y.

You are not on the Australian Electoral Roll.

You intend to advise Medicare and your health insurer of being a foreign resident when you leave Australia.

You will cancel the lease on the property you are renting, unless your wife and child decide to reside there temporarily when they move to Australia.

You intend to return to Australia on occasions to visit your family, totalling no more than 28 days per year.

You will resign from your job on accepting the job offer in Country Y.

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)

Domicile Act 1982

Superannuation Act 1976

Superannuation Act 1990

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 TR 2023/1 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 relevant period 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.

You were born in Country Z, and you are a citizen of Country Y.

You have not taken up citizenship in Australia therefore you do not have a domicile in Australia.

We considered the following factors in forming our conclusion:

•                     You will leave Australia to take up the contract in Country Y

•                     The contract is initially for a number of years with the option of an extension

•                     You will live in employer provided accommodation in Country Y which you lived in previously in Country Y

•                     You own a property in Country Y, which you acquired in 20XX

•                     The property has never been rented and has always been available at any time for you and your family to reside in if you chose to no longer accept the offer of employer provided accommodation.

•                     Your personal and household effects have remained in Country Y

•                     You do not own any property in Australia and have been renting a property the entire time you have been in Australia

•                     You have no sporting or social connections in Australia

•                     You have high level social connections in Country Y

•                     You are not on the Australian Electoral Roll.

•                     You intend to advise Medicare and your health insurer of being a foreign resident when you leave Australia

•                     You will not be in Australia for more than 183 days in the relevant income years.

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

You will not be a resident of Australia for taxation purposes from the relevant date.

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