Edited version of private advice

Authorisation Number: 1052265522641

Date of advice: 24 June 2024

Ruling

Subject: Residency

Question

Did the deceased remain an Australian resident for tax purposes after their departure on DD MM 20YY?

Answer

Yes.

The deceased meets at least one of the four tests for Australian tax residency; therefore, they are a resident of Australia for taxation purposes.

This ruling applies for the following periods:

Year ended 30 June 20YY

Year ended 30 June 20YY

Year ended 30 June 20YY

Year ended 30 June 20YY

Year ended 30 June 20YY

Year ended 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts and circumstances

Person A (the deceased) left Australia on DD MM 20YY to visit their relatives in City X of Country X.

They also wished to visit their ill parent in Country X.

The deceased was a Country X and Australian citizen.

The deceased lived in Australia as early as 19YY.

When the deceased departed Australia, they were under a XXXX and they had been finding the requirements set down for them as overly onerous.

At the time of departure, the deceased had X children who remained in Australia.

The deceased did not bring their children with them to Country X. The children remained with their respective biological parent.

The deceased had a partner whom they were separated from and was the parent of their youngest child.

The deceased retained ownership of X residential rental properties in Australia at the time of their death.

The rent they obtained as income was used to fund their travel as well as proceeds from the sale of X previously owned residential rental properties.

The deceased's intentions were to return to Australia to be close to their children and occupy one of their investment properties.

Prior to the deceased's departure, they were renting XXXX style accommodation at the back of another home.

Relatives state the deceased was very frugal with furniture and food and did not have a lot of personal belongings.

In Australia, the deceased was employed by Employer X for at least XX years. They were employed on a non-permanent basis before departing Australia.

Whilst in Country X, the deceased was unemployed.

The deceased was staying with their relative for a short period at address A.

The deceased had stayed in a hotel at address B.

The deceased had stayed in a social hotel at address C.

It is believed the deceased however, stayed at more addresses than ones listed and constantly moved around whilst in Country X.

At the time of the deceased's death, they were residing in boarding house style accommodation and had been staying in this type of accommodation for at least X years.

It is apparent that the deceased's mental health deteriorated whilst in Country X. Whilst they still contacted their children by phone, it was unclear as to when they would return.

The deceased maintained superannuation accounts in Australia, throughout their absence in Australia, but did not contribute to them post departure as they were unemployed.

The deceased is a member of the Public Service Superannuation scheme but did not make contributions to the fund after their departure.

The deceased died in Country X on DD MM 20YY.

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 the deceased's circumstances, and conclude that they are a resident of Australia for the 20YY to 20YY income years, as follows:

•         They are not a resident of Australia according to the resides test.

•         They meet the domicile test because their domicile is in Australia, and the Commissioner is not satisfied their permanent place of abode is outside of Australia.

•         They do not meet the requirements of the 183 day test. Whilst the deceased was in Australia for 183 days during the 20YY income year, the Commissioner is satisfied that from the start of the ruling period on DD MM 20YY:

o   Their usual place of abode is outside Australia, and

o   They do not intend to take up residence in Australia.

•         They do not fulfil the requirements of the Commonwealth Superannuation test.

More information

For more information about residency, see Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.