Edited version of private advice

Authorisation Number: 1052406605334

Date of advice: 19 June 2025

Ruling

Subject: Residency

Question

Will I be considered an Australian tax resident for the duration of a 12-month temporary stay in Country B?

Answer

Yes

This ruling applies for the following periods:

Year ending 30 June 20XX

The scheme commences on:

XX XX 20XX

Relevant facts and circumstances

You were born in Australia and have resided here on a permanent basis. You and your children, aged X and X, are dual citizens of Australia and Country B.

Your spouse is an Australian citizen and is currently in the process of applying for a one-year partner visa in Country B.

You and your sons are scheduled to depart Australia on XX XX, arriving in Country B on XX XX.

Your spouse will follow shortly after, departing on XX XX and arriving in Country B on XX XX.

You intend to temporarily relocate to Country B with your spouse and children from mid-XX XX to late XX XX, with the clear intention to return to Australia. The purpose is recreational-to enjoy an extended holiday and experience a different culture.

Your extended family remains in Australia. You maintain close relationships with your family, with whom you share weekly family dinners. Your XX is actively involved in your children's care, looking after them regularly. You also maintain a cordial relationship with your XX and XX, whom you typically see on a regular basis.

You have some extended family residing in Country B. Your relatives lives approximately XX hours from your intended residence and you may visit briefly during your stay. Additionally, your other relative, who lives about XX hours away, has been assisting you with administrative matters. Given that their children are close in age to yours, you anticipate visiting him every XX to XX months.

You have secured a 12-month rental apartment in Country B for the duration of your stay. The property was obtained through a publicly available rental market and is not associated with any family member or employer.

You applied for the lease independently and were accepted as a tenant.

You intend to enrol your children in a local school in Country B for the duration of your stay and your spouse will undertake XX classes.

You intend to continue performing your duties remotely as a XX of your Australian proprietary limited company, which operates as a trustee for a X trust. All income earned during your time abroad will be actively generated through your work for this Australian-based business and will be derived solely from Australian.

You are currently employed part-time as a lecturer with XX. You are in discussions with your employer regarding the possibility of taking leave without pay during your time overseas. However, if this arrangement cannot be accommodated, you may be required to resign from the position in XX XX.

Your spouse will be on long service leave for the first period of the family's stay in Country B, followed by leave without pay for the remaining months. She is required to return to work by XX XX.

Your wife holds shares in companies listed on the Australian Securities Exchange (ASX) and receives dividend income from these investments.

You own a home in Australia, which will be rented out during your 12-month stay in Country B. You will retain ownership of the property.

You own vehicles in Australia, which you will retain during your time overseas for use upon your return.

You have multiple Australian bank accounts and credit cards.

You lease commercial office in Australia, with rent and utilities in your or your company's name. The office will remain set up and in use by a co-occupant during your absence, and you intend to resume using it upon your return.

You do not currently hold any assets in Country B, apart from a single bank account which you opened online.

You may obtain a local phone and SIM cards during your stay in Country B. You have arranged a rental car for the first month and may consider purchasing a vehicle for the remainder of the stay.

You have booked one-way tickets to Country B for your family's departure. Return flights have not yet been booked, as airlines typically release fares approximately 12 months in advance of the travel date.

You do not have any employment arranged in France and do not intend to undertake any paid work during your stay.

You have rented a storage unit in Australia, where you will place personal and household belongings for the duration of your stay in Country B.

You plan to pause your Australian private health insurance during your time in Country B, as permitted by your insurer. You will be covered by travel insurance, and your private cover can be reactivated immediately if you return to Australia for medical care.

You are an active member of a local XX club in Australia and have previously served on its committee. You currently represent XX on a national professional advisory panel. You have no social, sporting, or cultural ties in Country B, though you intend to join a gym for personal fitness during your stay.

You have not notified any financial institutions, Medicare, the Australian Electoral Commission, or any investment bodies of a change in your residency status

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

These reasons for decision accompany the Notice of private ruling for Mr Tristan Stanley-Cary.

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

Issue

Residency

Question

Will I be considered an Australian tax resident for the duration of a 12-month temporary stay in Country B?

Answer

Yes

Detailed reasoning

Overview of the law

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 a resident of Australia under the resides test for the period XX XX 20XX to XX XX 20XX.

We have taken the following into consideration when determining whether you meet the resides test:

   • You have been living in Australia permanently.

   • Your move to Country B is temporary and recreational with a clear intention to return to Australia after your trip.

   • Your extended family, social clubs, and professional affiliations remain in Australia.

   • You will continue working remotely for your Australian company and maintain your Australian office.

   • You retain ownership of your Australian home which will be leased out during your 12-month stay in Country B, vehicles, and financial assets.

Although the law only requires you to be considered a resident under one test, for completeness the other tests are also considered.

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 Australia, and your domicile of origin is Australia. You hold dual citizenship in both Australia and Country B. While you are a XX citizen, it is considered that you have not abandoned your Australian domicile of origin, nor have you established a domicile of choice in Country B. Your intention is to temporarily relocate to Country B with your spouse and children from XX XX 20XX to late XX 20XX. This relocation is not considered permanent, as you have a clear and continuing intention to return to Australia at the conclusion of your stay.

Therefore, your domicile is Australia.

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] FCA 29 (Harding) 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 definitely 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; and

   • 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

As mentioned above in relation to the Harding case, one of the two key considerations in determining whether a taxpayer has their permanent place of abode outside Australia is whether the taxpayer has 'definitely abandoned, in a permanent way, living in Australia'

Although you will be temporarily relocating to Country B with your spouse and children from mid of XX 20XX to late XX 20XX, it is for recreational purposes and to experience an extended holiday and cultural immersion, we note that:

   • Your intended stay in Country B is limited to a fixed 12-month period, from mid of XX 20XX to late XX 20XX.

   • You will reside in a leased apartment during your time in Country B, which is temporary in nature and not indicative of a permanent relocation.

   • Your intention to return to Australia is clear and substantiated by the retention of your residential property in Australia.

   • You continue to maintain strong personal, familial, and economic ties to Australia, reinforcing your connection and ongoing association with the country

The Commissioner is not satisfied that your permanent place of abode is outside Australia because:

   • it is considered that the above factors together demonstrate you will maintain a durability of association with Australia

   • you have not definitely abandoned, in a permanent way, living in Australia.

Therefore, you are 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 will not be present in Australia for 183 days or more during the 20XX income year. Accordingly, you will not be considered a resident under the 183-day test for that year.

However, you will be present in Australia for 183 days or more during the 20XX income year. As a result, you will be considered a resident under this test unless the Commissioner is satisfied that your usual place of abode was outside Australia and that you did not intend to take up residence in Australia during that period.

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 not satisfied that your usual place of abode is outside of Australia for the 20XX income year based on the following:

   • Your accommodation in Country B is leased and intended solely for a fixed 12-month period, and not indicative of a permanent relocation.

   • Although your Australian home will be leased while you are in Country B, you have retained your primary residence in Australia, which you will reside in upon your return.

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.

Application to your situation

The Commissioner is satisfied that you do intend to maintain your residency in Australia for the 20XX income year because:

   • You will be returning to Australia, with your spouse and children, to live in XX 20XX.

   • You have retained ownership of your primary residence in Australia during your temporary stay overseas.

   • Your extended family remains in Australia, and you maintain regular contact and strong personal ties.

   • Your financial affairs, including bank accounts and credit cards continue to be based in Australia.

   • The overseas stay is of a fixed duration (12 months), and your accommodation in Country B is temporary in nature.

Therefore, you are a resident of Australia for the 20XX income year under the 183-day 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

You satisfy the resides and domicile tests for the 20XX and 20XX income years.

You also satisfy the 183-day test of residency and so are a resident of Australia for income tax purposes for the year ended XX XX 20XX.

Therefore, you remain a resident of Australia for tax purposes for the 20XX and 20XX income years.

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