Edited version of private advice

Authorisation Number: 1052157314837

Date of advice: 17 August 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes from the relevant date?

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 Z.

You are a citizen of Country Z.

You lived and worked in Country Z.

You joined Employer Z.

You purchased some land and built a family home in Country Z.

You started to look for opportunities in other countries with Employer Z.

You decided to apply for a permanent resident visa for Australia which would allow you to enter Australia.

You decided to take up an opportunity in Country Y.

A number of years ago you started the assignment in Country Y, while keeping your Country Z home available to you.

You made trips to Australia as part of your role, and bought an investment property in Australia, which you rented out.

A few years later, you were offered an internal Employer Z assignment in Australia.

You bought an investment property in Australia.

In the following year you moved to a rental property to be closer to your children's schools.

A year later, you began preparations to move to Country Z to take up a role which required you to be in Australia for a number of years and the same amount of time in Country Z.

You put the first Australian property on the market as it did not have as significant returns as the other property.

Professionally you had to ensure that the Employer Z team was adequately transitioned before you could move to Country Z.

Later that same year you sold the first investment property.

You were not able to relocate back to Country Z due to Covid.

During a period of several months, you were performing work for Country Y part of the Employer Z business.

A few months later Employer Z went through a significant re-organisation.

You were offered an extension of your assignment. However, despite reorganization HR policy didn't change. this was going to be the last extension, after which there would be no job with Employer Z in Australia

You applied for Australian citizenship.

In the same year you purchased another rental property in Australia.

Later that year you are granted citizenship in Australia.

Shortly thereafter your spouse and children get their Australian citizenship.

Towards the end of the year a job opportunity in Country X came up.

You accept the position in Country X.

You depart Australia permanently several months later.

You do not intend on returning to Australia to live.

You have leased a long term rental property in Country X.

You arrange for all of your belongings to be sent to Country X.

You opened bank accounts in Country X.

Your property in Australia is placed on the market and is sold.

Your spouse and children depart Australia to join you in Country X.

Your spouse returned to Australia for a short visit to finalise the property sale in Australia.

You have had your name removed from the Electoral Roll in Australia.

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

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 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 relevant period 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 while your domicile is in Australia you have a permanent place of abode in Country X.

We considered the following factors in forming our conclusion:

•                     You have gone to Country X to live and work

•                     Your spouse and children have also joined you in Country X

•                     You have a rental property in Country X

•                     You have no intention on returning to Australia to live

You were not in Australia for more than 183 days in the relevant income year and you will not be in Australia for more than 183 days in the future income years.

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

You will not be a resident of Australia for taxation purposes for the relevant income years.