Edited version of private advice

Authorisation Number: 1052164764343

Date of advice: 5 September 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 2019

Year ended 30 June 2020

Year ended 30 June 2021

Year ended 30 June2022

The scheme commenced on:

1 July 2018

Relevant facts and circumstances

You were born in Country Z.

You are a citizen of Country Z and Australia.

You came to Australia a number of years ago to work.

You obtained Australian citizenship a couple of years later.

You relocated to Country Y several years later.

For a period of time, you worked in Australia for your employer.

Since XX XXX 20XX to the present date, you have lived and worked in Country Y.

You and your spouse have separated.

Your spouse lives in Australia.

You no longer financially support your spouse.

You have adult children in Australia which you no longer financially support.

You have removed your name from the Australian the Electoral Roll.

You are a tax resident of Country Y.

You lodge tax returns in Country Y and are in receipt of a pension there.

You are registered for social security and Medicare in Country Y and also registered on the electoral roll.

You have not lodged an Australian tax return for a number of years.

You have no Australian sourced income.

You have not been in Australia for more than 183 days in any financial year since leaving Australia permanently with the exception of an earlier financial year.

During the financial year you visited your family and friends in Australia for period of several months.

During this time period you suffered a severe medical condition for a period of several months, which was medically treated in Australia and which precluded you from flying back to Country Y earlier.

You stay with your spouse or other family members when in Australia.

You do not have any assets in Australia.

You hold Australian superannuation funds into which funds were paid during your employment years ago.

All of your assets are in Country Y.

You rent a property in Country Y.

You are a member of a club in Country Y.

You have not made any contributions into the Australian Superannuation Funds following your departure.

You have contributed to a private retirement fund in line with Country Y's social and tax rules, to support your retirement costs and future disabilities costs.

Neither you nor your spouse are contributing members of a Commonwealth Superannuation Fund.

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 your domicile is not in Australia as you have a permanent place of abode in the Country Y.

We considered the following factors in forming our conclusion:

•         You have been living in Country Y for a number of years.

•         You and your spouse have separated.

•         You are a resident of Country Y for taxation purposes.

•         You do not have any property in Australia.

•         You do not intend on living in Australia

•         You were in Australia for more than 183 days in a previous income year as you suffered a medical condition and was not able to travel back to Country Y.

•         You did not intend on taking up residence in Australia and your usual place of abode was in Country Y.

•         You have not been in Australia for more than 183 days in the relevant 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.