Edited version of private advice

Authorisation Number: 1052137395038

Date of advice: 19 July 2023

Ruling

Subject: Income tax - residency

Question

Are you an Australian resident for tax purposes?

Answer

Yes. We conclude that for the periods from DDMM20XX to DDMM20XX, you are a resident of Australia for tax purposes when you committed to stay in Australia and applied for a permanent visa. Your behaviour and connection to Australia from that date supported your intention to stay and was no longer consistent with that of a tourist or visitor.

This ruling applies for the following periods:

For the income year ended 30 June 20XX

For the income year ended 30 June 20XX

For the income year ended 30 June 20XX

For the income year ended 30 June 20XX

The scheme commence on:

DDMM20XX

Relevant facts and circumstances

You were born in a foreign country in 19XX.

On DDMM20XX you arrived in Australia on a 12-month visa.

After 12 months in Australia, you renewed your first working holiday visa to allow for a further 12-month second visa.

You commenced full time employment with the X (your employer) during the 20XX-XX income year.

You initially lived in shared accommodation by renting a room with a family that you had met while backpacking.

You intended on making Australia your permanent home and lodged your application for an employer nomination permanent visa on DDMM20XX.

You were automatically granted a bridging A visa which allowed you to stay lawfully in Australia while permanent visa application was being processed.

On DDMM20XX you were granted a bridging B visa which allowed you to travel outside of Australia until DDMM20XX while your permanent visa application was being processed.

Since arriving in 20XX you have only left Australia to visit family or friends overseas for short periods of time before returning again and you have not worked overseas during this period.

You have a spouse in Australia and in 20XX you both jointly contributed financially to purchasing a home and currently live there together. The legal title of the property is in your spouse's name only due to your visa status.

On DMM20XX you and your spouse registered an Australian company which owns Australian assets such as a business motor vehicle and work tools/equipment.

The utility services in your home such as gas and electricity are connected in your name.

In Australia you operate a joint bank account with your spouse, as well as a single bank account.

In Australia you own two motor vehicles and a boat.

On DDMM20XX you married your spouse.

You do not receive any income from overseas sources.

You have no assets located outside of Australia and you no longer maintain a home overseas.

All of your personal possessions and effects are located only within Australia.

You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990.

You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976.

You are not the spouse or a child under 16 of a person who is a member of the PSS or an eligible employee in respect of the CSS.

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.

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 2023/1 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 periods from DDMM20XX to DDMM20XX, you are a resident of Australia for tax purposes as follows.

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

•         You arrived in Australia in 20XX on a working holiday maker visa.

•         You were born in a foreign country however you applied for a permanent visa on DDMM20XX so you could make Australia your home.

•         You no longer maintain a home or own any other assets located overseas.

•         Your personal possessions and effects are located only within Australia.

•         You and your spouse purchased a home in Australia in 20XX and you currently live there together.

•         In 20XX you married your spouse.

•         The gas and electricity services in your home are connected in your name.

•         In Australia you operate a joint bank account with your spouse, as well as a single bank account.

•         You have full time Australian employment and do not receive any income from overseas sources.

You were in Australia for 183 days or more during the 20XX-20XX income years.

We considered the following factors in forming our conclusion:

•         Since arriving in 20XX you have only left Australia to visit family or friends overseas for short periods of time before returning again and you have not worked overseas since first arriving on the working holiday maker visa or their associated bridging visas.

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