Edited version of private advice

Authorisation Number: 1052093456309

Date of advice: 6 March 2023

Ruling

Subject: Residency

Question

Did you resume your residency status for taxation purposes on you return to Australia?

Answer

Yes.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You were born in Australia.

You are a citizen of both Australia and Country Z.

You moved to Country Z over a decade ago to marry and live.

You did not work in Country Z.

You and your spouse have separated.

Your spouse remains in Country Z.

You moved back to Australia in a previous financial year.

Approximately two decades ago you purchased a home in Australia which you lived in.

When you went to Country Z you rented this property out.

The property was rented until recently.

Your household items were placed in storage and were sold several years ago.

You sold the property in Australia when you returned.

A contract was signed shortly after you returned to Australia and settlement occurred in the following month.

You purchased another home in Australia after settlement.

You came to Australia several months before your return, and stayed for a number of weeks.

When you went back to Country Z this is when you decided to separate from your spouse.

You decided to return to Australia permanently.

You brought back small items and clothing.

You have no joint assets with your spouse in Country Z.

You had no ownership in the property in Country Z you and your spouse lived in.

On arriving back in Australia, you immediately set about re-establishing your permanent residence in Australia, which included taking the following steps (in addition to acquisition of new residence):

•         Enrolling on the Electoral Register

•         Applying for Centrelink

•         Replacing driver's licence

•         Organised a new Medicare Card

•         Engaged local solicitors and tax agents

•         Signed up with a local medical practice.

You have siblings, as well as a nephew and his wife and child, who all live locally to you in State of XXX.

You are not eligible to contribute to the PSS or the CSS super fund.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Superannuation Act 1976

Superannuation Act 1990

Domicile Act 1982

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 relevant 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 have returned to Australia permanently

•         You and your spouse are separated and he remains in Country Z

•         You sold your existing house in Australia

•         You purchased another home in Australia

•         You have taken steps to resume your residency 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 resumed your residency status in Australia on the relevant date.