Edited version of private advice

Authorisation Number: 1052061120036

Date of advice: 24 November 2022

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes for the XXXX income year?

Answer

No.

This ruling applies for the following period:

Year ended XX

The scheme commences on:

XX

Relevant facts and circumstances

You were born in Australia.

You are a citizen of Australia.

You and your spouse relocated overseas for your spouse's employment.

You have lived in the one rental property overseas.

You moved all your belongings overseas.

You have a settled lifestyle in country Y and has the intention to reside there for the indefinite

future.

You and your spouse have no current plans to return to Australia.

Prior to the income year ended XXXX, you and your spouse spent minimal time in Australia, other than the occasional short visits for family events and holidays.

During the XXXX income year, however, you spent XX days in Australia due to various unforeseen circumstances.

You came back to Australia in the XXXX income year to settle your child into university.

While here in Australia your parent needed to undergo medical treatment.

In addition to this, Covid meant that you could not return to Country Y as planned as you did not know if you would be able to re-enter Australia to be with your parent if their condition worsened, so you made the decision to remain in Australia.

You have not been on the Australian electoral roll since XXXX.

Your private health insurance was cancelled.

You have been filing your Australian tax returns as a non-resident since your departure.

You retain some bank accounts in Australia; however, all postal addresses have been updated to the overseas addresses where possible.

You and your spouse both sold your motor vehicles before departing Australia. You have, however, subsequently acquired two other motor vehicles in Australia for your use while staying in the XXXX income year.

You and your spouse jointly own two real properties in Australia.

One of the properties remains vacant so family members can use it and your family home was initially rented out when you went overseas to live but you decided to use it while in Australia in the XXXX income year.

You do not have any employment or business income in Australia or in Country Y.

You are a dependent of your spouse.

Neither you nor your spouse are eligible to contribute to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) superannuation funds.

Relevant legislative provisions

Income Tax Assessment Act 1936 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 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 income year ending 30 June 2021 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 have been living overseas with your spouse for a number of years.

•         You are renting a property in Country Y which you have been living in since your arrival.

•         Your day-to-day life is in Country Y.

•         You do not intend on returning to Australia on a permanent basis in the near future.

You were in Australia for XX days in the XXXX income year but the Commissioner is satisfied that your usual place of abode is in Country Y and you did not intend on taking up residence in Australia during the XX the income year.

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

You were not a resident of Australia for taxation purposes for the XXXX income year.