Edited version of private advice

Authorisation Number: 1052403020015

Date of advice: 30 May 2025

Ruling

Subject: Residency

Question 1

Will you be a resident of Australia for taxation purposes when you return to Australia to live and work?

Answer 1

Yes.

Question 2

Can the value of the property be entirely excluded under paragraph 152-20(2)(b) Income Tax Assessment Act 1997 (ITAA 1997), as an asset used solely for personal use and enjoyment at the time of the Capital Gains Tax (CGT) event?

Answer 2

Decline to rule.

Question 3

If the property cannot be wholly excluded under question 2 can your spouse's share of the property be excluded, on the basis that they are not your affiliate under section 328-130 of the ITAA 1997 and you only control a portion of the tax law partnership?

Answer 3

Decline to rule.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You were born in Australia.

You are a citizen of Australia.

You and your spouse went to Country Z to live.

Your spouse went to Country Z for work purposes.

You were on a temporary visa.

You purchased a home in Country Z.

In the year after you moved to Country Z, your child was born.

Your spouse ceased work in Country Z.

Several months ago, you sold your home in Country Z and began travelling around.

In the same month that you sold the Country Z home, you shipped your belongings back to Australia in anticipation of your return to Australia.

Prior to selling the Country Z home, you and your spouse jointly purchased a home in Australia as your future main residence.

The Australian property was vacant until you rented it out.

You, your spouse, and child will return to Australia in a future month on a permanent basis.

The tenant will move out of the Australian property.

You and your family will move into the Australian property and commence treating it as your main residence.

You will update your address with the Australian property with the ATO, Medicare and banks.

You will rejoin your private health insurance in Australia.

You will renew your expired Australian driver's license with the Australian address.

You will enrol your child in local childcare.

You will take out a sports membership.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 subsection 152-20(2)

Income Tax Assessment Act 1997 section 328-130

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

Taxation Administration Act 1953 section 357-110

Reasons for decision

Question 1

For tax purposes, you are a resident of Australia if you meet at least one of the following tests.

You are not a resident of Australia if you do not meet any of the tests.

•                The resides test (otherwise known as the ordinary concepts test)

•                The domicile test

•                The 183 day test

•                The Commonwealth superannuation fund test

We have considered your circumstances, and conclude that you will be a resident of Australia for tax purposes from when you return to Australia to live as follows:

•                You will be a resident of Australia according to the resides test.

•                Your domicile will be Australia.

•                You will meet the 183-day test.

•                You do not fulfil the requirements of the Commonwealth superannuation fund test.

In summary, you are a resident of Australia for tax purposes from when you and your family return to Australia to live and work.

For more information about residency, see Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

Questions 2 and 3

We will not make a private ruling in relation to question 2 and 3 of the ruling about the maximum net asset value test.

This is because we will not make a ruling based on certain assumptions and consider the accuracy of your ruling would depend on the following assumptions:

•                the future use of the property

•                that your business will be sold at a time when the dwelling is used as a main residence

•                the timing of the sale of the business, which is the trigger event for the operation of the maximum net asset value test provisions

The Commissioner considers that the correctness of your ruling in relation to the maximum net asset value test under paragraph 152-20(2)(b) of the ITAA 1997 would depend on making assumptions about future events in circumstances where such assumptions would be speculative and unreliable.

The Commissioner is not prepared to make a ruling on this aspect on the basis of assumptions about future events and therefore is declining to rule on this matter under paragraph 357-110(1)(a) of Schedule 1 to the Taxation Administration Act 1953.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).