Edited version of private advice

Authorisation Number: 1052027676408

Date of advice: 1 September 2022

Ruling

Subject: Residency

Question

Are you an Australian tax resident from your arrival in Australia on XX/XX/20XX?

Answer

Yes.

This ruling applies for the following period:

Year ended 30 June 2022

The scheme commences on:

1 July 2021

Relevant facts and circumstances

You arrived back in Australia on XX/XX/20XX.

You are not yet sure when you plan to leave Australia, but you intend to stay for a number of years. After that time, you will consider when you leave.

You came to Australia to reunite with your child.

You are an overseas citizen and an Australian permanent resident.

You originally moved to Australian in late 20XX with your child to meet your spouse. You came to Australia on a permanent visa.

You left Australia mid-20XX with your child due to serious issues with your spouse. You started working overseas and living with your parents.

In early 20XX, your child was brought back to Australia by their other parent.

In late 20XX, you entered Australia again to see your child.

Your ex-spouse would not allow you to take your child back overseas. Therefore, you stayed in Australia.

Between late 20XX to early 20XX, while you lived in Australia, you were employed with your overseas employer.

In early 20XX, you resigned from your overseas employer due to failing to obtain your ex-spouse's consent to take your child back overseas.

You have started your own business while caring for your child at the same time.

While in Australia, you have not lodged any foreign income tax returns

You are residing in settled accommodation.

From mid-20XX you do not have a spouse.

You have three dependents that include your child in Australia and your parents overseas.

You do not own a property in Australia.

You have bank accounts overseas.

Your mailing address is your Australian address.

In 20XX you joined a sporting club and a professional's club in Australia.

You do not maintain any professional, social, or sporting connections overseas.

You have an Australian drivers' license.

You obtained Australian private health insurance in 20XX.

You are not a Commonwealth of Australia Government employee for superannuation (super) purposes.

You are not a member of the Public Sector Superannuation Scheme.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

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

Reasons for decision

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:

•                    Taxation Ruling IT 2650 Income tax: residency - permanent place of abode

•                    Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.

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, starting XX/XX/20XX, you are a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are a resident of Australia according to ordinary concepts.

We also consider that your domicile is not in Australia as:

•                    You intend to stay in Australia for several years.

•                    You do not intend to stay in Australia permanently.

You were in Australia for 183 days or more during the 2022 income year, and the Commissioner is not satisfied that both:

•                    your usual place of abode is outside Australia, and

•                    you do not intend to take up residence in Australia.

We considered the following factors in forming our conclusion:

•                    You arrived in Australia in late 20XX.

•                    You have not left Australia.

•                    You have spent just under a year living in Australia.

•                    You have set up a business in Australia.

•                    You intend to stay in Australia for several years.

•                    You have acquired your Australian driver's license and have established professional and sporting connections in Australia.

•                    Your movements and habits were consistent with having a settled routine in Australia.

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

Although you do not meet the domicile test or the Commonwealth superannuation fund test, you meet the resides test and the 183 day test. As you meet at least one residency test, you are a resident of Australia for tax purposes from your arrival in Australia on XX/XX/20XX.