Edited version of private advice

Authorisation Number: 1052123741328

Date of advice: 13 June 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 ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Country B.

You are a Country B citizen, as well as a resident of Country B for tax purposes.

You have been an Australian citizen for the past 28 years.

Your spouse and child are dual citizens of Country B and Australia.

Your residence and mailing address is in Country B. You have owned and lived at the apartment you reside in for the past 20 years.

When completing incoming and outgoing passenger cards, you state Country B as your residency status and address.

You are retired and have no active income in Country B.

The assets you own in Country B include:

•         the apartment you reside in

•         bank accounts

The income you earn from Australia include:

•         Rent from your investment property

•         Interest from bank accounts

Your time within Australia:

Year ended 30 June 20XX

•         Fewer than 90 days: You travelled from Country B to Australia accompanying your child to help them to settle into University. Your spouse accompanied you on your trip to and from Australia.

Year ended 30 June 20XX

•         Fewer than 183 days: You stayed in Australia purchase an apartment for investment purposes.

Year ended 30 June 20XX

•         Trip continued from prior year

•         Fewer than 90 days: You stayed in Australia purchase an apartment in Australia for investment purposes

•         Fewer than 30 days: You returned to Australia. You and your family returned to Country B together.

While in Australia you mainly stayed in hotels and Air BnB accommodation. You also stayed with a friend for one week.

You maintained your apartment in Country B as your home when you travelled to Australia.

You do not have an intention to travel in the coming years, other than small length trips for leisure.

You plan to remain living in Country B with your family. You have no plans to relocate to Australia.

You do not have regular or permanent accommodation in Australia.

When you were in Australia you did not develop any professional, social or sporting connections.

You do not have a driver's licence, private health insurance or household effects in Australia.

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 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 1 July 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 not in Australia. We considered the following factors in forming our conclusion:

•         You were born in Country B.

•         You have been living in your flat located in Country B for more than 20 years.

•         You stayed in short-term accommodation while visiting Australia.

•         You have maintained this home during your visits to Australia.

•         During your visits to Australia you made no professional or social connections.

•         You intend to reside in Country B.

•         You have no present intention to become a resident of Australia.

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

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 and for the income years ended 30 June 20XX to 30 June 20XX.