Edited version of private advice

Authorisation Number: 1052170303781

Date of advice: 20 September 2023

Ruling

Subject: Residency

Question

Were you a resident of Australia for taxation purposes during the period from XX XXXX 20XX to XX XXXX 20XX when you were in a Foreign Country?

Answer

Yes.

This private ruling applies for the following period:

XX XXXX 20XX to XX XXXX 20XX

The scheme commenced on:

XX XXXX 20XX.

Relevant facts and circumstances

Your country of origin is a Foreign Country. You are also a citizen of another country.

For the X years prior to your arrival in Australia you lived in a Foreign Country.

You lived in rented accommodation in a Foreign Country until XXXX 20XX. You then stayed in temporary accommodation by yourself until your departure for Australia in XXXX 20XX. You did not maintain a permanent place to live in a Foreign Country after departing for Australia.

You arrived in Australia on XX XXXX 20XX. You did not have a return airline ticket to a Foreign Country. You do not have a position or job being held for you in a Foreign Country. You stayed in temporary accommodation. You had most of your personal and household effects with you.

You came to Australia with the intention of residing here for X or more years into 20XX. You later extended this until 20XX.

In XXXX 20XX, as you didn't find work in Australia, you decided to spend some time in a Foreign Country. You departed Australia on XX XXXX 20XX and returned on XX XXXX 20XX. Your intention being to return to Australia either when your spouse was coming over in XXXX 20XX or earlier if work turned up in Australia. You took your personal and household effects with you to a Foreign Country. You stayed at your spouse's place for three weeks and then one week in holiday accommodation.

You maintained no accommodation in Australia when you spent time in a Foreign Country in XXXX and XXXX 20XX.

You opened a bank account in Australia in XXXX 20XX.

In a Foreign Country, you have a bank account, few credit cards and some household effects.

You received your final Foreign Country employment income after your arrival in Australia. However, this was for work done in a Foreign Country prior to your arrival in Australia.

You had no Australian employment until after XXXX 20XX. However, you were actively seeking work from your arrival in Australia.

Someone became your de facto spouse from XXXX 20XX when you were both in Australia. Prior to XXXX 20XX, your spouse had been completing the lease on their property in a Foreign Country.

You did not have any social or sporting connections with Australia until XXXX 20XX when you joined a social group.

In a Foreign Country you played casual soccer when employed with your former employer.

You are not a resident of another country for tax purposes during your stay in Australia.

Your spouse was not already a citizen or permanent resident of Australia.

Neither you nor your spouse is a Commonwealth of Australia Government employee for superannuation purposes.

You are not enrolled in a course of study in Australia that is more than six months long.

Relevant legislative provisions

Subsection 6(1) of the Income Tax Assessment Act 1936

Reasons for decision

Issue

Residency

Question

Were you a resident of Australia for taxation purposes during the period from XX XXXX 20XX to XX XXXX 20XX?

Answer

Yes.

Summary

You remained a resident of Australia for tax purposes during your visit to a Foreign Country during the period from XX XXXX 20XX to XX XXXX 20XX.

Detailed reasoning

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 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 from XX XXXX 20XX to XX XXXX 20XX when you were in a Foreign Country, you were a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you were a resident of Australia according to ordinary concepts for the period from XX XXXX 20XX to XX XXXX 20XX.

Your domicile is not in Australia as your country of origin is a Foreign Country and you have not indicated an intention of adopting Australia as a domicile of choice, for example, by adopting Australian citizenship. You were not a resident under this test.

You arrived in Australia on XX XXXX 20XX. You departed Australia for a Foreign Country on XX XXXX 20XX and returned to Australia on XX XXXX 20XX. You were in Australia for less than 183 days during the 20XX income year. You were not a resident under this test.

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

Conclusion

It is sufficient for you to be a resident under one of the four residency tests to be a resident for tax purposes. You were a resident of Australia under the resides test for the period from XX XXXX 20XX to XX XXXX 20XX. Therefore, you were a resident of Australia for taxation purposes during this period.