Edited version of private advice

Authorisation Number: 1052121268200

Date of advice: 22 May 2023

Ruling

Subject: Residency

Question

Are you an Australian resident for taxation purposes for the period XX July 20XX to XX June 20XX?

Answer

No.

This ruling applies for the following period:

Year ending XX June 20XX

The scheme commenced on:

XX July 20XX

Relevant facts and circumstances

Your country of origin is Australia. You are a citizen of Australia.

You have resided in COUNTRY A for several consecutive years. You travel to Australia for several weeks to visit family.

When you complete incoming and outgoing passenger cards, you state you reside in COUNTRY A and provide COUNTRY A as your address.

You have a COUNTRY A Immigration Permit which allows you to reside and work in COUNTRY A. The length of this visa is tied to the length of your contract supplied by your employer. Your employer has renewed your contract several times therefore renewing your visa each time.

You intend on applying for naturalisation in COUNTRY A. Your intention is to reside in COUNTRY A on a permanent basis and retire there.

You shipped all your personal and household effects to COUNTRY A from Australia.

You and your spouse live in employer provided accommodation. You are looking to purchase a property in COUNTRY A.

You are a member of a sports club in COUNTRY A. You have a COUNTRY A drivers' licence.

Your family including your children living in Australia are not financially dependent on you.

You own a car in Australia which you have given to your child. You intend to transfer the title of this car to your child.

You advised the Australian Electoral Commission that you had departed Australia.

You have a personal bank account with COUNTRY A's bank which you use for your savings.

You own a property in Australia which is under mortgage by a savings account. This bank account is not used for any other purpose, and you have advised the bank of your relocation to COUNTRY A.

You child resides in the property. You do not use this property as a receiving address for mail nor do you send mail to this address for postal redirection.

Your mailing address is a COUNTRY A address.

Neither you nor your spouse are eligible to contribute to the PSS or the CSS Commonwealth super funds.

Relevant legislative provisions

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

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 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 XX July 20XX to XX June 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 the Commissioner is satisfied that your permanent place of abode is outside Australia. We considered the following factors in forming our conclusion:

•         You have resided in COUNTRY A for several consecutive years. You travel to Australia for two weeks a year to visit family.

•         You have a visa in COUNTRY A which allows you to reside and work in COUNTRY A. This visa has been renewed several times by your employer.

•         You intend on applying for naturalisation in COUNTRY A. Your intention is to reside in COUNTRY A on a permanent basis and retire there.

•         You have social and economic connections to COUNTRY A. You are a member of a sports club in COUNTRY A, have a COUNTRY A drivers' licence and have worked only in COUNTRY A since 20XX.

•         You brought all your household and personals effects from Australia to COUNTRY A.

•         You own a property in Australia and your child resides in the property. You do not use this property as a receiving address for mail nor do you send mail to this address for postal redirection.

You were not in Australia for 183 days or more during the 20XX income year.

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