Edited version of private advice

Authorisation Number: 1052297443233

Date of advice: 28 August 2024

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes from XXXX 20XX to 30 June 20XX?

Answer

Yes.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

XXXX 20XX

Relevant facts and circumstances

You were born in XXXX and are a XXXX citizen.

You moved to Australia in XXXX 20XX with intention of staying permanently.

You entered Australia as a temporary resident from XXXX and the special category visa allows you to stay in Australia permanently.

You have been working in Australia full time on a permanent basis since XXXX 20XX.

You will declare foreign income from sources outside Australia when you lodge your income tax return for the 20XX financial year.

You have no immediate travel plans.

Your parents and siblings live in XXXX.

Prior to moving to Australia, you resided with your parents in XXXX.

You are currently house sitting and looking for a rental property to move into in XXXX, Australia.

Your mailing address is in XXXX, Australia

You do not own a property in XXXX or Australia.

You have an Australian and XXXX driver's licence.

You intend to live in Australia permanently with your Australian partner.

You are not a Commonwealth of Australia Government employee.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

Overview of the law

Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).

The terms 'resident' and 'resident of Australia', as applied to an individual, are defined in subsection 6(1) of the ITAA 1936.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are:

•         the resides test (also referred to as the ordinary concepts test)

•         the domicile test

•         the 183-day test, and

•         the Commonwealth superannuation fund test.

Only one of the tests needs to be met for an individual to be a resident of Australia 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 for deciding the residency status of an individual. This test considers whether an individual resides in Australia according to the ordinary meaning of the word 'resides'.

The ordinary meaning of the word 'reside' has been expressed as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place': See Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99 per Latham CJ, citing Viscount Cave LC in Levene v Inland Revenue Commissioners [1928] AC 217 at 222, citing the Oxford English Dictionary. Likewise, the Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.

The Commissioner considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test:

•         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.

It is important to note that no one single factor is decisive, and the weight given to each factor depends on each individual's circumstances.

Because the resides test is about whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Having a connection with another country, or being a resident of another country, does not diminish any connection to Australia. The ordinary meaning of reside does not require an individual to have a principle or usual place of residence in Australia.

Application to your situation

In your case, you have relocated to Australia where you will establish a home and live with your Australian partner with the intention of staying permanently.

Therefore, you are a resident of Australia under this test.

Domicile test

Under the domicile test, you are a resident of Australia if your domicile is in Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia.

Domicile

Whether your domicile is in Australia is determined by the Domicile Act 1982 and the common law rules on domicile.

Your domicile is your domicile of origin (usually the domicile of your father at the time of your birth) unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice of a particular country you must be lawfully present there and hold the positive intention to make that country your home indefinitely. Your domicile continues until you acquire a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts.

Application to your situation

In your case, you were born in XXXX. You migrated to Australia in XXXX 20XX where you intend to live with your Australian partner permanently.

In your case, it is too early to say your domicile has changed. Therefore, your domicile is not in Australia.

Therefore, you are not a resident of Australia under this test.

The 183 day test

Where a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that both:

•         the person's usual place of abode is outside Australia, and

•         the person does not intend to take up residence in Australia.

Application to your situation

You were present in Australia for less than 183 days in the 20XX income year.

Therefore, you are not a resident of Australia under this test.

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 situation

You are not a resident under this test.

Residency Conclusion

As you satisfy the resides test of residency, you are a resident of Australia for income tax purposes from XXXX to the 30 June 20XX.