Edited version of private advice

Authorisation Number: 1052100447585

Date of advice: 28 March 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You were born in Country Y

You are a citizen of Australia.

You have a residency visa to enter Country Z.

You intend on obtaining permanent residency of Country Z.

You and your spouse along with your children departed Australia permanently to live in Country Z.

You and your spouse have secured permanent accommodation in Country Z.

You and your spouse have purchased a motor vehicle in Country Z.

You and your spouse have opened bank accounts in Country Z.

Your children are enrolled in school in Country Z.

You and your family have private health cover in Country Z.

Your spouse is studying part-time in Country Z.

You and your spouse cancelled your private health cover in Australia.

You and your spouse sold your cars in Australia.

You and your spouse have removed your names from the Australian electoral role.

You and your spouse are not a member of any Australian associations.

You and your spouse have notified your banks that you are no longer living in Australia and are non-residents.

You and your spouse have two properties in Australia which are on long term rental agreements.

You and your spouse have no intention of returning to Australia.

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.

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 years, you are not a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are not 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 outside Australia. We considered the following factors in forming our conclusion:

•         You have gone to Country Z to live permanently

•         Your spouse and children have accompanied you to Country Z

•         You do not intend on returning to Australia

•         You have permanent accommodation in Country Z

•         Your children are enrolled in school in Country Z

You will not be in Australia for more than 183 days in the relevant income years.

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

You are not a resident of Australia for taxation purposes.