Edited version of private advice

Authorisation Number: 1052055485746

Date of advice: 9 November 2022

Ruling

Subject: Residency for taxation purposes

Question

Are you a resident of Australia for taxation purposes?

Answer

Yes.

This ruling applies for the following period:

20XY

The scheme commences on:

20XX

Relevant facts and circumstances

Your country of birth is XXX.

You are a citizen of XXX and have a XXX passport.

You lived in XXX your entire life until you moved to Australia on XX 20XX.

Your spouse and child arrived in Australia a week prior to you.

Your family live in a unit in Australia on a XXX lease. The lease commenced on XX 20XX.

Your child is enrolled at a primary school in XXX and your spouse is studying at XXX.

You commenced fulltime employment with XXX ('your employer') on XX 20XX. Your employer is your visa Sponsor.

You were granted a XXX Visa on XX July 20XX which expires on XX July 20XX. After four years, you intend to apply for a XXX which will allow you to live and work in Australia permanently.

You own a car in Australia and have a bank account set up with an Australian Financial Institution.

When you left XXX, you arranged for all your possessions to be shipped to Australia.

You and your spouse own a property in XXX which you are in the process of selling.

Since arriving in Australia, you have established connections mostly through your child's school including parent/teacher activities and your child's sports activities.

When completing your incoming travel card upon your arrival in Australia, you listed the address of your unit in XXX as your residential address.

You have an Australian driver's licence.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

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 Draft Taxation Ruling TR 2022/D2 Income tax: residency tests for individuals.

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 a resident of Australia.

Taking into account the following factors, we have concluded that you are a resident of Australia according to ordinary concepts:

•         You have a XXX lease for a residential unit in XXX.

•         Your family relocated to Australia and are staying with you. Your spouse is studying fulltime and your child is enrolled and attending a primary school.

•         You are in the process of selling the property that you own in XXX.

•         You intend on eventually applying for permanent residency once this is available to you.

You were not in Australia for 183 days or more during the 20XX income year and therefore do not satisfy the 183 day test and are not a resident under this test.

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