Edited version of private advice

Authorisation Number: 1052295869031

Date of advice: 27 August 2024

Ruling

Subject: Residency

Question

Will the taxpayer be a resident of Australia for taxation purposes from the date he permanently departed Australia on XX May 20XX under subsection 6(1) of the Income Tax Assessment Act (ITAA) 1936?

Answer

No.

This ruling applies for the following periods:

XX May 20XX to XX June 20XX

Year ending XX June 20XX

Year ending XX June 20XX

Year ending XX June 20XX

The scheme commenced on:

XX May 20XX

Relevant facts and circumstances

You were born in Australia XX December 19XX.

Your domicile of origin is Australia, this is your country of birth, and you hold an Australian passport.

You served in Company A for XX years before retiring from service approximately XX months ago.

You married your now ex-partner in 19XX.

You and your ex-partner have XXX children, aged XX and almost XX, with the youngest finishing school in City A.

You and your ex-partner separated in October 20XX and later divorced.

You married your current partner in September 20XX.

Your partner was born in Country A and moved to Australia in 20XX.

Your partner became an Australian citizen and Australian passport holder in 20XX.

Your partner has XXX children with her ex-partner, XXXXX aged XX and a XXX, XX, who attends boarding school on the City B.

You resided in City A for XX years.

You spent one year temporarily overseas in the Country B, however you remained a resident of Australia for tax purposes.

Your principal place of residence (PPOR) in City A was Property A.

This property was transferred to your ex-partners name as part of the marriage separation settlement proceedings.

You were subsequently required to take up a property in City A as part of your role and seniority in the Company A.

You commenced your relationship with your now partner in September 20XX.

You relocated to City C where you and your partner signed a rental agreement on a property.

You and your partner jointly purchased a townhouse in City C in 20XX, at Property B.

This property was your PPOR.

You also own an investment Property C. You are the sole owner of this property, there is no mortgage, the property has a long-term tenant, and you derive the rental income.

Your parent passed away in 20XX, leaving you a X, XXX acre property located at Property D.

This property was stocked with XX head of cattle. The cattle were owned jointly by you and your relative (your parent's sibling.

The maintenance of the property and the cattle have been through the employment of various caretakers/farm managers since your partent's passing.

You and your partner have stored some of your personal belongings in an unused shed/outbuilding on the property, these are things that you do not require on a day-to-day basis and included some limited items of furniture and a classic XXXXXXXXXX vehicle.

Your partner's parents are deceased, they have XXX siblings living in Country A, a sibling and a cousin in Country C.

You have XXX siblings, one in City D and one in City E.

You have undertaken some consulting/advisory and board work since retiring from Company A.

You are also the director if a small company in City F, however you do not receive any payment for your director services for this role.

Permanent move to City G, Country D:

Whilst you retired from Company A, you were not ready to completely retire. You had various discussions with potential employers, you found there were no roles in Australia that would fully utilise your knowledge and skills, therefore you began looking for employment positions and opportunities outside Australia to where you and your partner could permanently relocate.

You were approached about a XXXXXX XXXXXXXX role in Country D, in March 20XX, you received a formal offer of employment from Company B to work as Position A in City G.

This is an open-ended contract for an indefinite period, you fully expect this role to be for several years. You and your partner expect to permanently reside in City G for a period of at least X-X years.

Your partner is currently completing an XXX, with the intention to complete this while in City G, and will subsequently seek employment in City G.

You and your partner permanently departed Australian XX May 20XX to commence this role and reside permanently and indefinitely in City G.

Due to your previous career with Company A and the prestige and seniority of your rank with Position A assisting the Country D XXXX XXXXX, you were required to obtain a Foreign Work Authorisation from the Australian Government to accept this role and permanently move to City G. This clearance was obtained prior to your departure.

The consulting and advisory contracts with organisations in Australia that you were undertaking prior to the permanent move to City G have now been terminated.

You will maintain your director role for the small company in City F, you do not receive payment for this role and only requires a few hours of your time which you will perform remotely from City G.

You and your partner have obtained Employment Resident Visas which allow you both to work and reside in City G for XXX years. This type of visa is for expatriates and includes an option to extend.

You are paid through the Company B payroll into your Country D bank account.

Company B pay you all the required payments mandated under Country D law through the Country D payroll.

You have set up a bank account in Country D to receive your Country D pay and for your day-to-day expenses.

You and your partner engaged a real estate agent to put your City C property on the market for rent upon confirmation of your departure date. A long-term tenant has been signed and moved into the property.

You and your relative decided to sell the XX head of cattle on Property D due to your permanent departure.

You also leased this property including the buildings and land to a local third-party agricultural company that will have exclusive use of the land and building to run their own cattle on the land. This is a long-term lease for XXXX years, with an option to extend.

The utilities for this property remain in your name as the electricity charges are minimal and there are no water charges. You receive rental income from the tenant for their exclusive use of the land and buildings.

You and your partner owned X vehicles between you in Australia, XXX of these being classic cars that have been put into storage in Australia.

You and your partner's other XXX vehicles which were used on a day-today basis have either been sold or gifted/loan to family members.

You and your partner have notified your Australian banks that you are no longer tax residents of Australia and that non-resident withholding tax should apply to any interest income payments.

You and your partner have suspended or cancelled all unnecessary professional and social memberships in Australia including:

•         The XXXXXXXXX XXX Club of State A

•         The XXXXXXXX Gymnasium, City C

You have also changed your memberships for the Australian Institute of Company Directors to an International Member (Fellow) with your City G address.

You and your partner have removed yourselves from the Australian Electoral Roll as you no longer reside in Australia and do not intend to vote in future elections while living permanently in City G.

You and your partner have suspended your Australian Private health Insurance with your Australian provider, XXXX Health.

You and your partner have cancelled your Australian mobile phone contracts.

You and your partner will maintain your weapons and firearms licences and are in the process of transferring these firearms licence to an equivalent Country D licence.

Your two children from your previous marriage live separately to you in City A.

You partner's children, the XXXXX are adults and live independently. The younger XXX is at boarding school and their parent is thier primary carer. It is expected that this arrangement will continue with you and your partner in City G. There is an intention that the younger child will visit thier parent in City G and your partner may visit them occasionally in Australia.

Your partner will continue to be responsible for the payment of some of their youngest child's school fees as well as providing a weekly allowance for them.

Home in City G, Country D

You and your partner have signed a long-term lease agreement for permanent accommodation. This is for a fully furnished apartment. The lease is intended for XXXXX renewal.

The apartment lease is in you and your partner's name only and for your exclusive use.

You and your partner have set up home in City G, including arranging your personal affairs and establishing a routine as part of your everyday life.

You and your partner have a number of friends and associates residing in City G and now intend on building on your network of friends and undertaking social activities with them.

You and your partner have taken most of your day-to-day personal possessions to City G when you departed XX May 20XX.

Your personal items that were not taken have either been disposed of, gifted to family and friends, or put into storage.

You have diverted your necessary mail to your home in City G. You will still receive any electronic correspondence in City G.

You and your partner have purchased new mobile phone contracts with a local provider in City G.

You have commence establishing business contacts in City G and the Country D.

You did not intend to renew your Australian vehicle registrations and have obtained a Country D driver's licence to facilitate your daily lifestyle. Your partner also intends to obtain a Country D driver's licence.

You and your partner intend to purchase a car in City G for your everyday use, this will be garaged at your home in City G.

You and your partner intend to join professional and social memberships including:

•         Monthly XXXXXXX XXX Club - City G

•         The XX XXXXX XXXXXXXXX Sports and XXXXXXXXX Club

•         The XXXXXX Gymnasium - City G

You and your partner intend to occasionally visit Australia X-X times a year, staying a maximum of XXX weeks to visit friends and family You will both reside in hotels, serviced apartments, or stay with extended family and friends.

You are receiving a XXXXXXX XXXXXXX from your time in Company A.

You or your partner are not employees of the Commonwealth Government of Australia and have not been members of the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS).

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997subsection 995-1

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 XXX day test

•         The Commonwealth superannuation fund test

We have considered your circumstances, and conclude that you were not a resident of Australia for XX May 20XX - XX June 20XX, 20XX-XX, 20XX-XX- and 20XX-XX income years, as follows:

•         You were not a resident of Australia according to the resides test.

•         You do not meet the domicile test because your domicile is not in Australia, and the Commissioner is satisfied that your permanent place of abode is outside Australia.

•         You do not meet the XXX day test because you will not be in Australia for XXX days or more during the 20XX-XX, 20XX-XX and 20XX-XX income year/s, and 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.

•         You do not fulfill 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.