Edited version of private advice

Authorisation Number: 1052402406195

Date of advice: 25 June 2025

Ruling

Subject: Residency

Question 1

Are you an Australian resident for tax purpose for the income year 20XX-20XX?

Answer 1

No

This ruling applies for the following period

30 June 20XX

The scheme commenced on:

XX XX 20XX

Relevant facts and circumstances

This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect, and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You were born in City A, Country A.

You are a citizen of Country A.

You first arrived in Australia on the XX XX XX and departed Australia on the XX XX XX.

You later arrived back in Australia to live for a longer interval and officially made Australia your home.

You migrated to Australia as a permanent resident (subclass visa), to work as a professional.

You moved to Australia alone, while your parents and siblings remained in your country of birth.

Upon your arrival in Australia, you rented a place and continued renting different place, until the time you left Australia.

Prior to moving away, you lived in City B, in Australia.

You do not own any property in Australia.

You receive Income from personal investments and trades through a trading account.

Your source of Income is dividends from an Australian Company.

Company ABC is involved in general trading and investment. It is managed entirely remotely.

The company does not have any clients in the traditional sense.

You are single and do not have any friends or family in Australia.

Since arriving in City A on the XX XX XX you have remained in Country A.

Your intention to move back to Country A was to provide ongoing support to parents.

You have rented an apartment in City A under a formal 12- month lease agreement that began in XX XX XX.

You have rented an apartment in City A and re-established your residential ties.

Your tenancy period is for one year, starting as of XX XX XX - XX XX XX.

Prior to leaving Australia, you sold or gave away all your personal belongings including your car and furniture.

You cancelled your private health insurance and removed yourself from the electoral role.

You no longer maintain personal or social ties to Australia and have no intention of returning to live there in the foreseeable future.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

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

Reasons for decision

These reasons for decision accompany the Notice of private ruling for Mr Sadegh Nourossana

This is to explain how we reached our decision. This is not part of the private ruling.

Issue

Residency

Question 1

Are you an Australian resident for tax purpose for the income year 20XX-20XX?

Summary

You have been a resident of Australia for taxation purpose since XXXXX.

You will not remain a resident of Australia for taxation purpose, as you now reside in XXXXX for the foreseeable future.

Detailed reasoning

Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).

The terms 'resident' and 'resident of Australia', as applied to an individual, are defined in subsection 6(1) of the ITAA 1936.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are:

•                the resides test (also referred to as the ordinary concepts test)

•                the domicile test

•                the 183-day test, and

•                the Commonwealth superannuation fund test.

The resides test is the primary test for deciding the residency status of an individual. This test considers whether an individual resides in Australia according to the ordinary meaning of the word 'resides'.

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, 183-day test and Commonwealth superannuation fund test).

Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

We have considered the statutory tests listed above in relation to your situation as follows:

The resides test

The ordinary meaning of the word 'reside' has been expressed as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place': See Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99 per Latham CJ, citing Viscount Cave LC in Levene v Inland Revenue Commissioners [1928] AC 217 at 222, citing the Oxford English Dictionary. Likewise, the Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.

The observations contained in the case of Hafza v Director-General of Social Security (1985) 6 FCR 444 are also important:

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248; and Keil v Keil [1947] VLR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 235... here the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.

The Commissioner considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test:

•                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.

It is important to note that no one single factor is decisive, and the weight given to each factor depends on each individual's circumstances.

Because the resides test is about whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Having a connection with another country, or being a resident of another country, does not diminish any connection to Australia. The ordinary meaning of reside does not require an individual to have a principle or usual place of residence in Australia.

Application to your situation

You are not a resident of Australia under the resides test for the period 20XX-20XX based on the following:

•                Your intention to move back to Country A was to provide ongoing support to your ageing parents.

•                On XX XX XX, you permanently left Australia.

•                You have rented an apartment in Country A under a formal 12- month lease agreement that began in XX XX XX.

•                You were born in City A, Country A.

•                You are a citizen of Country A.

•                Prior to leaving Australia, you sold or gave away all your personal belongings including your personal assets and possessions.

•                You cancelled your private health insurance and removed yourself from the electoral role.

•                You no longer maintain personal or social ties to Australia and have no intention of returning to live there in the foreseeable future.

Based on the information you have provided; the Commissioner is satisfied that you are not residing in Australia according to ordinary concepts. This may change if you decide to return to Australia and meet the residency test for tax purposes.

You may still be an Australian resident if you meet the conditions of one of the other tests (the domicile test, 183-day test and Commonwealth superannuation fund test).

Domicile test

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

Domicile

Whether your domicile is in Australia is determined by the Domicile Act 1982 and the common law rules on domicile.

Your domicile is your domicile of origin (usually the domicile of your father at the time of your birth) unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice of a particular country you must be lawfully present there and hold the positive intention to make that country your home indefinitely. Your domicile continues until you acquire a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts.

Application to your situation

In your case, you were born in X and your domicile of origin is X. You immigrated to Australia on XXXXX as a permanent resident.

You have been living and working in Australia.

You have been an Australian citizen on XX XX XX.

It is considered that you did not abandon your domicile of origin in Country A and acquired a domicile of choice in Australia. You are a dual citizen of Country A and Australia.

You moved back to Country A, to take care of your family. Who are currently facing some health-related challenges.

You have resided in City A, Country A having left Australia, notwithstanding your travel to Continent B.

Therefore, your domicile is Country A, and you are not a resident of Australia under the domicile test.

Permanent place of abode

If you have an Australian domicile, you are an Australian resident unless the Commissioner is satisfied that your permanent place of abode is outside Australia. This is a question of fact to be determined in light of all the facts and circumstances of each case.

'Permanent' does not mean everlasting or forever, but it is to be distinguished from temporary or transitory.

The phrase 'permanent place of abode' calls for a consideration of the physical surroundings in which you live, extending to a town or country. It does not extend to more than one country, or a region of the world.

The Full Federal Court in Harding v Commissioner of Taxation [2019] FCAFC 29 held at paragraphs 36 and 40 that key considerations in determining whether a taxpayer has their permanent place of abode outside Australia are:

•                whether the taxpayer has abandoned, in a permanent way, living in Australia

•                whether the taxpayer is living in a town, city, region or country in a permanent way.

The Commissioner considers the following factors relevant to whether a taxpayer's permanent place of abode is outside Australia:

•                the intended and actual length of the taxpayer's stay in the overseas country

•                whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or to return to Australia at some definite point in time

•                whether the taxpayer has established a home (in the sense of dwelling place; a house or other shelter that is the fixed residence of a person, a family, or a household), outside Australia

•                whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence

•                the duration and continuity of the taxpayer's presence in the overseas country

•                the durability of association that the person has with a particular place in Australia, i.e. maintaining assets in Australia, informing government departments such as the Department of Social Security that he or she is leaving permanently and that family allowance payments should be stopped, place of education of the taxpayer's children, family ties and so on.

As with the factors under the resides test, no one single factor is decisive, and the weight given to each factor depends on the individual circumstances.

Application to your situation

The Commissioner is satisfied that your permanent place of abode is outside Australia because:

•                You left Australia on XX XX XX permanently.

•                You have vacated your leased residence in Australia and

•                Leased a new residence in City A, Country A.

•                You do not have any ties to Australia, be it religious, cultural or sporting.

Therefore, you are not a resident of Australia under the domicile test.

183-day test

Where a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that both:

•                the person's usual place of abode is outside Australia, and

•                the person does not intend to take up residence in Australia.

Application to your situation

You have not been present in Australia for 183 days or more during the 20XX-20XX income year. Therefore, you are not a resident under this test. You were present in Australia for only XX days. Therefore, you will not be a resident under this test unless the Commissioner is satisfied that your usual place of abode was in Australia, you do not have intention to take up residence in Country A. The facts presented by you, clearly indicate that you have all the intention to take up residence in Country A.

Usual place of abode

In the context of the 183-day test, a person's usual place of abode is the place they usually live and can include a dwelling or a country. A person can have only one usual place of abode under the 183-day test. However, it is also possible that a person does not have a usual place of abode. This is the case for a person who merely travels through various countries without developing any strong connections.

If a person has places of abode both inside and outside Australia, then a comparison may need to be made to determine which is their usual place of abode. When comparing two places of abode of a particular person, we will examine the nature and quality of the use which the person makes of each particular place of abode. It may then be possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the person's usual place of abode: Emmett J at [78] in Federal Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836.

Application to your situation

The Commissioner is satisfied that your usual place of abode was outside Australia for the relevant income 20XX-20XX based in the following:

•                You left Australia on the XX XX XX.

•                You do not rent or own any property in Australia.

•                You have leased a property in City A, Country A and Intend to live there for the foreseeable future.

•                You sold your tangible assets in Australia prior to your move to Country A.

•                And your usual place of abode is in City A, Country A.

•                Finally, you have not returned to Australia, during the financial year.

Intention to take up residency

To determine whether you intend to take up residence in Australia, we look at evidence of relevant objective facts. 'Intend to take up residency' does not merely mean intend to stay for a long time. It means intending to live here in such a manner that you would reside here.

Paragraph 20 of TR 2023/1 explains that the ordinary concepts test asks whether an individual's presence in Australia is usual and settled (as opposed to temporary and causal) and considers the nature, duration, and quality of the individual's presence in Australia, as well as their intention to treat Australia as home

Application to your situation

The Commissioner is satisfied that you did not intend to take up residence in Australia for the relevant income 20XX-20XX because:

•                You have leased a property in X and intend to stay there for the foreseeable future to take care of your old parents.

•                You do not own any property in Australia.

You have not been present in Australia for 183 days or more during the 20XX income years. You have, however after travelling, been present in Country A for a significant part of the 20XX income year, where you have decided to reside permanently. Therefore, you are not a resident under this test.

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 situation

You are not a member on behalf of whom contributions are being made to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) or a spouse of such a person, or a child under 16 of such a person. Therefore, you are not a resident under this test.

Conclusion

As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the 20XX income year ended 30 June 20XX.

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