Edited version of private advice

Authorisation Number: 1052219029797

Date of advice: 13 February 2024

Ruling

Subject: Resident for taxation purposes

Question

Will you be a resident of Australia for taxation purposes during the income years covered by the ruling period?

Answer

Yes.

This ruling applies for the following periods:

Income year ending 30 June 20XX

Income year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You are a citizen of, and were born in, Australia.

Your spouse (Person A) is a citizen of Country X, who has not lived there for some years after coming to Australia.

You and your family, being your spouse and children aged under 10 years of age, departed Australia to travel to Country A, arriving on the same date.

You travelled to Country A on a spousal visa as Person A is a national of Country A. The visa allows you to stay in Country A for a limited period and your intention is to return to Australia 12 months after your departure to Country A.

You do not have return plane tickets as you flew to Country X on standby and anticipate that you will do the same in relation to your return flight to Australia.

You will stay in Country X for the duration of your time overseas when you and your family will visit Person A's family, travel, and share the culture and traditions in Country X with your children.

You and your family initially stayed with Person A's parents after your arrival in Country X.

You and your family are staying in a rental apartment that Person A has rented for 12 months. You can move out and cancel the contract at any time, with no penalty if Person A gives the required period of notice in advance.

Person A's family assisted you with household effects when you move into the rented apartment, such as providing beds, storage units and kitchen dishes. You are renting white goods for a 12-month period.

You and your family have only taken clothes with you to Country X.

You and Person A each have inactive bank accounts in Country X that had been emptied when you travelled to Australia when Person A came to Australia several years earlier.

Prior to leaving Australia you and your family lived at a property (the Property) jointly owned by you and Person A, which is mortgaged.

The Property was rented shortly after you departed to travel to Country X for 12 months. You will receive rental income while the Property is rented that will assist with mortgage repayments. You and your family will be returning to the Property when you return from Country X.

You and Person A have the following assets in Australia:

•         Jointly owned cars

•         The Property

•         Household furniture that has been put into storage for 12 months

•         You and Person A each have a superannuation account; and

•         Joint bank accounts.

You and your family have the following connections with Australia:

•         Your entire extended family, friends, colleagues, sporting team and gardening community. You are employed in the education industry in Australia and have taken 12 months leave without pay from your position for the school year in the first income year included in the ruling period, which is strictly for that period.

•         Person A has their in-laws, friends, colleagues and sporting connections. Person A has taken leave without pay for an extra month after you expect to return to Australia but can return to their employment earlier if they wish to.; and

•         Your children have relatives, friends and sporting connections. They attend a private school in Australia, with their spots being on hold for strictly 12 months as there are waiting lists to attend the school.

You and your family will have family connections in Country X but will not have any sporting connections.

Neither you nor Person A are Commonwealth Government of Australia employees for superannuation purposes.

You did not advise the Australian Electoral Office to have your name removed from the electoral roll.

You notified the two banks where you hold joint bank accounts that you would be overseas for 12 months.

You did not notify Medicare that you and your family were going overseas as Person A's employer pays health insurance on your family's behalf. You are in the process of completing paperwork to pause your membership for 12 months.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 995-1

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

For tax purposes, you are a resident of Australia if you meet at least one of the following tests. You are not a resident of Australia if you do not meet any of the tests.

•         The resides test (otherwise known as the ordinary concepts test)

•         The domicile test

•         The 183 day test

•         The Commonwealth superannuation fund test.

We have considered your circumstances in relation to your residency status for taxation purposes during the income years covered by the ruling as follows:

•         Income year ending 30 June 20XX

­   You are a resident of Australia according to the resides test due to you retaining your continuity of association with Australia while you are in Country X because of the location of the majority of your assets, employment and family members, with no intention to leave Australia on a permanent basis. The Property will continue being your 'home' while you are in Country X, to which you will return to live after your trip to Country X.

­   You meet the domicile test because your domicile is in Australia, and you are an Australian citizen. The Commissioner is not satisfied that you have established a permanent place of abode outside of Australia. It is not viewed that you will abandon your Australian domicile and make the choice to change your domicile during the period you are in Country X as you intend returning to Australia at the end of the 12-month period, travelling to Country X on a visa that only allows you to stay there for a limited period of time, and no intention to settle in Country X indefinitely.

­   You meet the 183 day test because you were in Australia for 183 days or more during this income year, being from the start of the income year until you departed to travel to Country X during the following year. Based on your circumstances, the Commissioner is not satisfied that your usual place of abode is outside Australia given the period of time you will be in Country X, and you will return to live in Australia upon your return from Country X; and

­   You do not fulfill the requirements of the Commonwealth Superannuation test and therefore do not meet this test.

•         Income year ending 30 June 20XX

­   You are a resident of Australia according to the resides test due to you retaining your continuity of association with Australia with no intention to leave Australia on a permanent basis as outlined above. Your 'home' in Australia remains your home to which you will return after your 12 month trip to Country X.

­   You meet the domicile test because your domicile is in Australia, and you are an Australian citizen. The Commissioner is not satisfied that you have established a permanent place of abode outside of Australia. It is not viewed that you will abandon your Australian domicile and make the choice to change your domicile during the period you are in Country X as you intend returning to Australia at the end of the 12-month period, travelling to Country X on a visa that only allows you to stay there for a limited period of time, and no intention to settle in Country X indefinitely,

­   You will not meet the 183-day test because you will not be in Australia for 183 days or more during the 2024-25 income year, only being in Australia from when you return to Australia after your trip to Country X until the end of the ruling period; and

­   You do not fulfill the requirements of the Commonwealth Superannuation test ad therefore do not meet this test.

Conclusion

You have met at least one of the residency tests to be a resident of Australia for taxation purposes in both income years considered in this ruling. Therefore, you are a resident of Australia for taxation purposes for the period covered by this ruling.