Edited version of private advice

Authorisation Number: 1052084883341

Date of advice: 7 February 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

Yes.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born overseas.

You are a Country Y citizen.

You are not a permanent resident of any other country.

You first came to Australia on a Working Holiday Visa on XX XX 20XX.

You then obtained a second Working holiday Visa on XX XX 20XX.

You have remained in Australia since 20XX.

You are now on a Bridging Visa awaiting an 820 visa.

In your first year in Australia, you travelled around.

You have no assets overseas.

You have no assets thus far in Australia.

You do not receive any income from any other country.

You do not pay tax in any other country.

Your Australian spouse is currently financially supporting you and your child.

You and your spouse live in a house which is provided by your spouse's employer as part of their renumeration package.

You are not currently working in Australia.

You have not left Australia since arriving in Australia on your second Working Holiday Visa.

You intend on living permanently in Australia.

You will only return to XX for a holiday.

You and your spouse are not eligible to contribute to the PSS or the CSS Commonwealth super 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, you are resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are 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 previously came to Australia on a working holiday visa.

•         You are now on a bridging visa.

•         You have been in Australia since 20XX continuously.

•         You live with your Australian spouse.

•         You and your spouse have a child together.

•         You intend on remaining in Australia on a permanent basis.

•         You only intend on returning to country Y for holidays.

•         Your spouse financially supports you and your child.

•         You live with your spouse in a home provided to your spouse by his employer.

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.