Edited version of private advice

Authorisation Number: 1052070477246

Date of advice: 14 December 2022

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are an Australian national.

You are a permanent resident of Country Y.

You have been a non-resident of Australia since the 20XX income year.

You and your family have been living in Country Y.

You and your family were living in your home in Country Y.

On XX XX 20XX your spouse and children decided to return to Australia.

Your family returned to Australia on XX XX 20XX, and you accompanied them back to Australia to assist them with settling in.

Your spouse secured a job in Australia.

Your family also secured a rental property in Australia.

It was decided that you would continue living and working in Country Y.

You were able to work remotely in Australia for your employer in country Y.

It was your plan to return to country Y in XX 20XX.

Your home in Country Y remained vacant for the period you were in Australia.

You were not able to Leave Australia until XX XX 20XX due to the Australian Government banning Australians from leaving Australia.

Country Y had strict quarantine rules.

Neither you nor your spouse have ever been Commonwealth government employees and you are not eligible to contribute to the PSS or the CSS super funds.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 995-1

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 years ended 30 June 20XX and 20XX, you are not a resident of Australia.

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:

•         Your family have returned to Australia to live.

•         You have remained living and working in Country Y.

•         You are living in the family home in Country Y.

•         You only returned to Australia to assist your family settling in.

While you were in Australia for more than 183 days during the 20XX and 20XX income years, you do not intend on taking up residency in Australia and your usual place of abode is in Country Y.

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

You are not a resident of Australia for taxation purposes for the 20XX and 20XX income years.