Edited version of private advice

Authorisation Number: 1052164523911

Date of advice: 19 September 2023

Ruling

Subject: Residency

Question

Is Person A a resident up until they departed Australia on XX XXX 202X and is their spouse, Person B, a resident up until they departed on XX XXX 202X?

Answer

Yes

This ruling applies for the following periods:

Year ended 30 June 202X

Year ending 30 June 202X

Year ending 30 June 202X

Year ending 30 June 202X

The scheme commenced on:

01 July 202X

Relevant facts and circumstances

Person A was born overseas in Country A.

Your spouse, Person B, was born in Australia.

You and your spouse are citizens of Australia.

You and your spouse have family in Australia.

You left Australia in 202X.

Your spouse and your children left Australia in 202X.

You, your spouse and your two children have move permanently overseas to Country B.

You, your spouse, and your children have attained Country B residency visas.

You and your spouse are on a 2-year rolling visa with the intention to rollover your visas indefinitely and are planning to stay in Country B for at least xx years.

You and your spouse have set up bank accounts in the Country B.

Both children are enrolled in schools in the Country B.

You and your spouse have purchased two cars, and both obtained their Drivers Licence in the Country B.

You and your spouse have permanent accommodation in Country B.

You and your spouse are currently renting an apartment with a one-year lease and intend to purchase a property in Country B when this lease expires.

Your spouse has joined a gym in Country B

You, your spouse and your children have International Private Health Cover.

You have obtained employment in Country B. You are employed in an electrical industry role. Your spouse is currently unemployed and completing home duties.

Prior to leaving Australia:

You and your spouse sold your cars just prior to departing to Country B.

You and your spouse removed yourselves from the Australian Electoral Role.

You and your spouse are no longer members of any Australian associations.

You and your spouse notified your Australian banks that you are no longer residents of Australia for tax purposes.

You and your spouse do not have any assets in Australia apart from X number of properties that were purchased previously and are now being rented out.

You and your spouse have no intention of returning to Australia.

Your spouse closed their second bank account with XXXX prior to departing Australia.

You and your spouse closed your XXXX credit cards.

You and your spouse notified your children's school that they were moving permanently to Country B and your children received their end of year reports and certificates early.

You and your spouse intend to come back to Australia to visit family.

You hold a Commonwealth of Australia Government Employee Superannuation - however this is through CSC - not CSS or PSS (through the Company A from XX September - XX January 20XX)

Your spouse was employed in Australia from March 20XX - January 20XX with Company B as a School Nurse and had superannuation through XXXX.

Neither you nor your spouse are the spouse or child under 16 of a person(s) who is a member of PSS or CSS.

You and your spouse will notify Medicare that you have left Australia.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Income Tax Assessment Act 1997 Subsection 995-1(1)

Reasons for decision

These reasons for decision accompany the Notice of private ruling.

Question 1

Is Person A a resident up until their departure from Australia on XX XXX 202X?

Question 2

Is Person B a resident up until their departure from Australia on XX XXX 202X?

Summary

Yes

Detailed reasoning

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 Tax Ruling 2023/1 tax residency 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 sixteen, 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 XXX 202X to XXXX, Person A is not a resident of Australia, and for the period XX XXX 202X to 202X, Person B is not a resident of Australia, as follows.

Taking into account your individual circumstances, we have concluded that you are not residents of Australia according to ordinary concepts following your respective departures from Australia.

We also consider that your domicile is not 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 left Australia XX March 20XX.

•         Your spouse and your children left Australia XX April 20XX.

•         You, your spouse and your two children have moved permanently to Country B.

•         You, your spouse, and your children have attained Country B residency visas.

•         You and your spouse are on a 2-year rolling visa with the intention to rollover your visas indefinitely and are planning to stay in Country B for at least XX years.

•         You and your spouse have set up bank accounts in Country B.

•         Both children are enrolled in schools in Country B.

You were all in Australia for 183 days or more during the 202X income year and are therefore residents under this test for that time. You are not residents under this test for the remainder of the 202X income year.

You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not residents under this test following the time you, your spouse and your children left Australia.

Conclusion

You do not satisfy the resides, domicile, and superannuation tests of residency and so you, Person A, are not a resident of Australia for income tax purposes from the day following the date of your departure in 202X to the year ending 202X, and your spouse, Person B, is not a resident of Australia for income tax purposes from the day following the date of their departure in 202X to the year ending 202X.

You satisfy the 183-day test and are therefore part year residents for the 202X income year.