Edited version of private advice

Authorisation Number: 1052285059996

Date of advice: 7 August 2024

Ruling

Subject: Resident of Australia for taxation purposes

Question:

Am I a resident of Australia for taxation purposes?

Answer:

No.

This ruling applies for the following period:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX.

Relevant facts and circumstances

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

You were issued a Country A investor visa that allowed you to enter Country A.

You departed Australia on to travel to Country A to live.

You became a resident of Country A for tax purposes.

You beneficially own residential property located in Country A and in Country B.

You beneficially own residential property located in Country C.

A business you established in Country A did not flourish, and you established a business in Country C in early XXXX.

You set up a Country C discretionary trust (the Trust) which owns a Country C corporate body that conducts a business (the Business).

The Business has rented commercial premises in Country C and employs you and several dozen staff.

You relocated to Country C with the intention to live there indefinitely.

You became a Country C tax resident.

You ceased being a Country A tax resident.

Your Country A investor visa expired.

You were issued, a Country C investor visa effective.

You were issued an 'indefinite leave to remain' in Country C which allows you to stay there indefinitely.

Your de facto partner is a Country A citizen.

You and your de facto partner have children and they, along with your de facto partner, live with you in the Country C residential property.

Your personal possessions are in both the Country A and in Country C.

You do not own any property in Australia.

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

Your parents live in Australia.

You travel movements for the previous financial year provides that you primarily live overseas.

You do not intend returning to Australia to live and will travel to Australia to visit for periods not exceeding a total of X days.

Neither you nor your de facto partner are eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 995-1

Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision

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 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 based on the information provided in the ruling that you will not be a resident of Australia for taxation purposes during the ruling period according to the ordinary concepts.

We consider that your domicile is in Australia. However, the Commissioner is satisfied that your permanent place of abode is outside Australia. We considered the following factors in forming our conclusion:

•         You departed Australia some years ago to originally live and work in Country A before moving to Country C to live there indefinitely.

•         You live in a residential property you beneficially own in Country C, and also beneficially own a property in both the Country A and Country B. You do not own any property in Australia.

•         You created the Trust which owns an entity that operates the Business. The Business rents a commercial premises in Country C and employs you and a significant number of staff.

•         Your de facto partner and your children are moving from Country A to Country C to live with you in the residential property.

•         You were issued an 'indefinite leave to remain' in Country C to allow you to stay there indefinitely.

You will not be in Australia for 183 days or more during the income years covered by the ruling period.

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