Edited version of private advice

Authorisation Number: 1052085970756

Date of advice: 10 February 2023

Ruling

Subject: Residency

Question 1

Were you a resident of Australia for tax purposes from DD/MM/YYYY to 30 June YYYY?

Answer

Yes.

Question 2

Were you a temporary resident of Australia for tax purposes from DD/MM/YYYY to 30 June YYYY?

Answer

Yes.

This ruling applies for the following period:

DD/MM/20XX to 30 June 20XX

The scheme commenced on:

DD/MM/YYYY

Relevant facts and circumstances

You were born in Country X.

You immigrated to Country Y from Country X in MM/YYYY.

You are a citizen of both Country Y and Country X.

You lived in a region of Country Y on a permanent basis for the five years prior to your arrival in Australia on DD/MM/YYYY.

Your purpose in coming to Australia was to reside here.

You have not maintained a permanent residence in Country Y subsequent to arriving in Australia.

You made the decision to move from Country Y to Australia around MM/YYYY, and you started selling your household items at this time.

In moving to Australia, you gave up your permanent rental accommodation and employment in Country Y.

You entered Australia on a temporary visa. This visa allows you to reside in Australia indefinitely.

You have not applied for permanent residency nor citizenship since arriving in Australia.

You do not hold a return airline ticket to Country Y.

Initially, your intention was to live with your partner in Australia for a number of years. Then, depending on a particular event occurring, you would either move to Country Z or reside indefinitely in Australia. A decision on this event has not yet been made.

Your partner is a citizen of Country Y and also entered Australia on a temporary visa.

You lived with your partner in Australia during the ruling period.

Prior to entering Australia for the purpose of living here, you had previously entered Australia on a holiday visa.

Since arriving in Australia for the purpose of living here, you have left Australia for holidays on X occasions. You obtained stamps on your passport from Country X for this travel, not your passport from Country Y.

Upon your arrival in Australia to live here, you lived in temporary accommodation for a period of time. You later found rental accommodation.

You have an Australian bank account.

When moving to Australia, you brought some savings and personal belongings with you.

Some of your belongings remained stored in Country Y, including a car. You planned to transfer these to Australia once you felt more settled. Due to COVID-19, you were delayed in travelling back to Country Y to arrange transportation of your belongings. You sold your car in DD/YYYY and transported your remaining belongings to Australia in YYYY.

Upon arriving in Australia, you had a term deposit account in Country Y. You decided to leave it there until it had matured. You also had a savings account, however transferred most of this money into an Australian account after the income year ending 30 June YYYY.

You resigned from your position with your employer in Country Y on DD/MM/YYYY. You applied for holiday leave for the end of your employment in Country Y, meaning your final day of employment was after you had entered Australia to live.

You have not personally lodged any foreign income tax returns since arriving in Australia. You had spoken to Country Y's tax administrator, who advised that they would automatically lodge income tax returns when they had details of income you received from your employment and any interest on savings.

You received savings interest from Country Y during the ruling period and for some time after.

You actively sought employment from the time you arrived in Australia. You found your first role a few months after entering Australia.

You do not have an employment position being held for you in Country Y.

You joined a social group in Australia in DD/YYYY and made some friends from this.

You do not maintain any social or sporting connections in Country Y.

You are not enrolled in a course of study in Australia that is more than six months long.

You have not been a resident of another country for tax purposes during your stay in Australia.

Neither you nor your partner are employees of the Australian Commonwealth Government for superannuation purposes.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 subsection 995-1(1)

Reasons for decision

Question 1

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 period from DD/MM/YYYY to 30 June YYYY, you were a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you were a resident of Australia according to ordinary concepts. We considered the following factors in forming our conclusion:

•         Physical presence - You entered Australia on DD/MM/YYYY and remained in Australia after the income year ended 30 June YYYY and have continued to be physically present in Australia.

•         Intention - You entered Australia on DD/MM/YYYY with the intention of residing here. Initially, your intention was to live with your partner in Australia for X years. Then, depending on a particular event occurring, either move to Country Z or reside indefinitely in Australia. A decision has not yet been made about this event.

•         Family ties - Your partner moved to Australia with you. You have family in Country Y, and your parents live in Country X.

•         Business and employment ties - You resigned from your employer in Country Y prior to entering Australia to live on DD/MM/YYYY. You do not have an employment position being held for you in Country Y. You began looking for employment in Australia from the time you entered the country and found employment in Australia a few months later.

•         Social arrangements - You joined a social group in Australia in MM/20YY and made friends from this. Your partner also moved to Australia with you to live. Conversely, you do not maintain any social or sporting connections in Country Y.

•         Living arrangements - During the ruling period, you lived in temporary accommodation with your partner in Australia. You later found rental accommodation in the same region. You do not have permanent accommodation available to you in Country Y.

•         Maintenance and location of assets - You began selling your household belongings in Country Y in MM/YYYY. You came to Australia with some savings and personal belongings. Your remaining belongings were transported to Australia in YYYY, except for your car, which you sold in Country Y in YYYY. Upon arriving in Australia, you still had a term deposit in Country Y, which you left there until maturity. You transferred most of your savings from Country Y into an Australian account after 30 June YYYY.

In your case, you were born in Country X and your domicile of origin is Country X. You immigrated to Country Y in DD/YYYY and became a citizen of Country Y.

It is considered that you abandoned your domicile of origin, Country X, after immigrating to Country Y and acquired a domicile of choice in Country Y. We consider that your domicile is Country Y and you are not a resident of Australia under the domicile test.

You were not in Australia for 183 days or more during the income year ended 30 June YYYY, therefore, you do not satisfy the 183-day test.

You do not fulfil the requirements of the Commonwealth Superannuation test.

As you satisfy the resides test, you are a resident of Australia for income tax purposes from DD/MM/YYYY to 30 June YYYY.

Question 2

Temporary resident of Australia for tax purposes

An individual is a temporary resident for taxation purposes if:

•         they hold a temporary visa granted under the Migration Act 1958, and

•         they are not an Australian resident within the meaning of the Social Security Act 1991, and

•         they do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991.

The Social Security Act 1991 defines an Australian resident as a person who resides in Australia and is an Australian citizen, the holder of a permanent visa, or a protected special category visa holder who was in Australia on or before 26 February 2001.

Based on the facts you have provided you are a temporary resident of Australia for taxation purposes because:

•         you hold a temporary visa issued under the Migration Act 1958, being Special Category visa (subclass 444), and

•         neither you nor your spouse are Australian residents within the meaning of the Social Security Act 1991.

As a temporary resident of Australia, you generally only need to declare:

•         Income you derived from Australian sources

•         any income you earn from employment or services performed overseas while you are a temporary resident of Australia.

Certain capital gains may also be exempt from Australian tax for temporary residents.