Edited version of private advice

Authorisation Number: 1052139876361

Date of advice: 17 July 2023

Ruling

Subject: Residency

Question

Will you be a resident under section 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for the 20XX and 20XX financial years?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

Background

You are an Australian citizen.

You lived in an Apartment in Australia prior to relocating overseas with your spouse.

Your parents are both Australian citizens and reside in Australia.

Your spouse is an Australian citizen but is a non-resident for Australian tax purposes.

You and your spouse have three children, all of whom are Australian citizens.

You are selling the Australian Apartment which will settle in the 20XX financial year.

You intend to use the proceeds of sale from the Apartment to buy a larger house in XX, so that they can spend more time caring for your grandchild and future grandchildren.

You are not currently engaged in paid employment. You volunteer for a Foundation.

You have lived in XX on a Dependent Pass which is connected to your spouses' visa conditions. You are not allowed to work in XX, open a bank account in your own name or enter into rental agreements in your own name.

Real estate and mail

The Apartment in Australia is owned by you.

Most mail is sent electronically, however, the car registration and utilities have the Apartment address listed as your home address.

You are enrolled on the Australian Electoral Roll with the Apartment listed as your residential address.

Assets and accommodation

You own a motor vehicle in Australia.

The majority of your personal belongings, including artwork, clothes, furniture, books and kitchen utensils, are located at the Apartment.

You and your spouse both have superannuation funds in Australia.

You have two bank accounts in your name. The address listed for these accounts is the Apartment address.

In the 20XX income year you spent over 183-days in Australia.

Personal life

Your closest friends all live in Australia.

You are a Member of a Golf Club in Australia.

You are a member of a Fitness Centre in Australia.

You are a member of a gym in Singapore.

You hold an Australian driver's licence.

You hold a valid Medicare card.

You have private healthcare insurance in Australia.

Tax returns

You have amended your income tax returns for the years ended 30 June 20XX and 30 June 20XX to reflect that you were an Australian tax resident for those years in light of your increased presence and connections to Australia.

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 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 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 you 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 a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are a resident of Australia according to ordinary concepts. We considered the following factors in forming our conclusion:

•                     Physical presence - You spent over 183-days in Australia during the 20XX income year.

•                     Intention or purpose of presence - You have spent a considerable amount of time in Australia living in your home and will continue to do so. Your overall residency intentions are to reside in Australia permanently.

•                     Behaviour while in Australia - You have spent your time in Australia living similarly to any other resident.

•                     Family ties - You have family in Australia including your children and paternal relatives.

•                     Maintenance and location of assets - You maintained personal and household effects in Australia during your time overseas. In Australia, your assets include your home, joint bank accounts and superannuation.

•                     Social and living arrangements - In Australia, you own a home, have an Australian driver's licence and private health insurance. You have strong family, social and professional connections in Australia.

We consider that your domicile is in Australia, and you did not have a permanent place of abode outside Australia in the 20XX income year and will also not have one in the 20XX income year. We considered the following factors in forming this conclusion:

•                     You spent XX days here in the 20XX income year and will continue to send a significant amount of time here

•                     You maintained a strong durability of association with Australia whilst overseas and will do so going forward

•                     You have not definitely abandoned, in a permanent way, living in Australia.

You were in Australia for 183-days or more during the income year ended XX June 20XX. Therefore, you satisfy the 183-day test because the Commissioner is satisfied that your usual place of abode is in Australia, and you intended to take up residence in Australia.

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

Conclusion

You satisfy the resides, domicile and 183-days tests of residency and so are a resident of Australia for income tax purposes for the years ending XX June 20XX and XX June 20XX.