Edited version of private advice

Authorisation Number: 1052115053164

Date of advice: 15 May 2023

Ruling

Subject: Residency

Question 1

Did you cease to be an Australian resident on the relevant date?

Answer

Yes.

Question 2

Will you be a non-resident of Australia for the 20XX income year?

Answer

Yes.

This ruling applies for the following periods:

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Australia and are an Australian citizen.

Your spouse was born and is a citizen of Country D and has never resided in Australia.

Your parents live in Australia.

You have one sibling who resides in Country C.

You rented an apartment in Australia prior to relocating to Country C.

You did not own any property prior to leaving Australia or currently own.

You departed from Australia on XX XXX 20XX and arrived in Country B on XX XXX 20XX before flying on to Country C on XX XXX 20XX (from Country B).

You and your spouse have moved to Country C because you have been in a long-distance relationship for over 5 years and the professional opportunities in Country C were superior.

You and your spouse intend to reside in Country C indefinitely, and do not intend to return to Australia in the near future.

You were granted residency status in Country C on XX XXX 20XX which allows you to work, use the NHS, study and travel in and out of that country. Your residency status does not expire until XX XXX 20XX.

You and your spouse live in a flat located in Country C.

You have arranged for your mail to be sent to your new premises in Country C prior to leaving Australia by completing change of address notices.

You have transported your clothing and major belongings to the Country C.

You currently have the following assets:

•         You have a bank account with monies in Australia.

•         You have shares.

•         You have unvested options in a company.

•         You are an appointer of several trusts.

•         You are the shareholder and/or beneficiary of several trustee companies/trusts.

•         You are a director several Australian companies.

•         You have retained your health insurance and remain on the electoral roll.

You intend to keep your bank accounts with Australia to deal with receipts and expenses with respect to your assets held in the country. The cash in these bank accounts will also be treated as investments.

You expect to visit Australia twice or three times per year to see your parents. You expect each of your visits to be approximately two or three-weeks duration.

You have no children or dependents.

Relevant legislative provisions

Income tax Assessment Act 1936 Subsection 6(1).

Reasons for decisions

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, from the period XX XXX 20XX 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 that you do not intend on acquiring a domicile of choice in Country C, however, the Commissioner is satisfied that your permanent place of abode is outside Australia. We considered the following factors in forming our conclusion:

•         You and your spouse have been living in Country C since XX XXX 20XX.

•         You and your spouse intend to reside in Country C.

•         You and your spouse do not intend on returning to Australia on a permanent basis.

•         You and your spouse live in a flat located in Country C. The flat is beneficially owned by your spouse.

•         You have transported your clothing and major belongings to Country C.

•         You have established an investment business in Country C where you will draw a salary and investment gains over time.

You were in Australia for 183 days or more during the 20XX income year; however, you are not a resident under this test because the Commissioner is satisfied that at the end of that income year both:

•         Your usual place of abode was outside Australia, and

•         You did not intend to take up residence in Australia.

You will not be in Australia for 183 days or more during the 20XX income year and you are therefore not a resident under this test.

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

You are considered a non-resident of Australia for taxation purposes effective XX XXX 20XX and also for the 20XX income year.