Edited version of private advice

Authorisation Number: 1052097228945

Date of advice: 20 March 2023

Ruling

Subject: Residency

Question

Were you a resident of Australia for the purpose of section 6(1) of the Income Tax Assessment Act 1936 for the 20XX income year?

Answer

Yes

Having considered your circumstances and the relevant factors the Commissioner is satisfied that you are a resident of Australia for income tax purposes.

This ruling applies for the following period:

XX XXX 20XX

The scheme commenced on:

XX XXX 20XX

Relevant facts and circumstances

Background

You entered Australia with your spouse and child.

You are on a visa.

Prior to your arrival in Australia, you lived overseas.

Your country of origin is overseas; however, you are a dual citizen to overseas countries.

Travel to Australia

After departing Australia on X XXX 20XX, you did not come to Australia for the remainder of the financial year ending XX XXX 20XX.

For the financial year ended XX XXX 20XX. you entered Australia on the XX XXX 20XX, remaining in Australia for a period of just over 12 months until your departure.

While in Australia you opened a bank account, rented a property, and bought household effects.

You were not enrolled for the electoral roll.

You intend to return to Australia later this year.

When you entered Australia, you intended to work, live, and study.

You attended TAFE in Australia and completed a Certificate III.

You advised you do not have any social and sporting connections to Australia.

Return to Country A

On the XX XXX 20XX, you left Australia to return overseas on an emergency travel document to see family.

You reside with family and did not have your own place while overseas.

You have overseas employment, and it is a permanent position.

You did not have your previous employment held for you; however, you are working for the same company again.

You advised you do not have any social and sporting connections overseas.

You have no assets overseas.

You put your household effects in Australia into storage.

Reasons for Decision

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 test 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 for 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 TR2022/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 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 XX XxxX 20XX to XX XX 20XX, you are a 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 considered that your domicile of choice is Australia, and the Commissioner is satisfied that permanent place of abode is not outside Australia. We considered the following factors in forming our conclusion:

•         you stated you intend to live in Australia and return later this year.

•         you are currently living with family overseas and do not own a home there.

•         you entered Australia on a visa which allows skilled workers to live and work in Australia as permanent residents. This visa is a permanent visa that lets you stay in Australia indefinitely and you become a permanent resident on the date the visa is granted.

•         your bank account is still active in Australia and household effects are in storage.

You were in Australia for 183 days or more during the 20XX income year, and the Commissioner is satisfied that both:

•         your usual place of abode was Australia, and

•         you intended to take up residence in Australia.

We considered the following factors in forming our conclusion:

•         you intend to return to Australia later this year

•         you are living with family overseas

•         you intend to return to Australia to continue working as per the visa.

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

Conclusion

As you satisfy one or more of the four tests of residency, you are a resident of Australia for income tax purposes for the year ended XX XxX 20XX

Relevant legislative provisions

Subsection 6(1) of the Income Tax Assessment Act 1936