Edited version of private advice

Authorisation Number: 1052083878775

Date of advice: 3 February 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Australia.

You have a permanent resident visa to enter Country Y as your spouse is a citizen of Country Y.

You have been a permanent resident of Country Y for a number of years.

You joined your family in Country Y on XX March 20XX.

You and your spouse were living in Country Y and your spouse was renting accommodation in Country Y.

Your adult child was in Country Y as well.

You and your spouse returned to Australia to live permanently on XX May 20XX.

You and your spouse initially rented accommodation in Australia until you purchased a home.

You are a freelance consultant in Australia.

You are working in Australia.

You and your spouse went back to Country Y in December 20XX for Christmas.

You returned to Australia in February 20XX.

You made another visit to Country Y in July 20XX and returned to Australia in September 20XX.

You went back to Country Y in December 20XX and returned to Australia in January 20XX.

Your visits to Country Y are to see your family.

It is your intention that Australia is your permanent home.

You do not intend on living in Country Y on a permanent basis.

You do not intend on being outside Australia for more than 183 days.

You have some clothing in Country Y and a small amount of superannuation which accrued in the 19XX's when you worked in Country Y.

You are not a resident of Country Y for taxation purposes.

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 and 30 June 2022, you are 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 in Australia and the Commissioner is satisfied that your permanent place of abode is not outside Australia. We considered the following factors in forming our conclusion:

•         You were previously living in country Y

•         Your family lived with you in Country Y

•         You and your spouse returned to Australia on XX May 2021 to live

•         You commenced working in Australia

•         You purchased a home in Australia

You intend on remaining in Australia and will be in Australia for more than 183 days.

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

You are a resident of Australia for taxation purposes.