Edited version of private advice

Authorisation Number: 1052030221899

Date of advice: 6 September 2022

Ruling

Subject: Residency for taxation purposes

Question

Are you a resident of Australia for taxation purposes?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 2023

The scheme commences on:

1 July 2022

Relevant facts and circumstances

You were born in Australia.

You are a citizen of Australia.

You have been living and working overseas for many years.

You have been a non-resident of Australia since leaving Australia.

You have lived and worked in Country Z for over a decade.

Your spouse has lived in Country Z for over a decade.

You have children who have never lived in Australia.

You have been working for the same employer in Country Z for the last few years.

You and your family have travelled to Australia several times over the past few years for short visits.

Your spouse and children intend on returning to Australia later this year.

You intend on purchasing a home for your family to live in.

You will visit your family in Australia for a number of days throughout the year over a number of visits.

Your family will visit you in Country Z a few times a year.

You intend on remaining in Country Z in the same employment.

You have friends and professional networks in Country Z.

You consider Country Z your home.

You have lived at the same home in Country Z for the last few years.

This property is in your name and the lease has been extended. You intend on renewing the lease.

You have bank accounts, motor vehicles personal items and furniture in Country Z.

You have properties in Australia. One is rented and the other properties remain vacant and are used by your family from time to time.

You intend to establish a family trust to build an investment portfolio in Australia. The trust will be managed by an Australian resident corporate trustee of which you and your spouse will be directors.

Neither you nor your spouse are eligible to contribute to the PSS or the CSS super fund.

You are not on the Australian Electoral roll.

You have local Country Z health insurance.

You and your family do not have health insurance in Australia.

You will put that you are visiting Australia on your incoming passenger card when visiting Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 6(1)

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 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, 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 in Australia and the Commissioner is satisfied that your permanent place of abode is outside Australia. We considered the following factors in forming our conclusion:

•                    You do not intend on being in Australia on a permanent basis.

•                    You live and work in Country Z.

•                    Your family intend on returning to Australia later in the year.

•                    You will remain living and working in Country Z.

•                    You will visit your family in Australia. These trips will not exceed 183 days in any financial year.

•                    Your family will visit you in Country Z.

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 for taxation purposes.