Edited version of private advice

Authorisation Number: 1052300063018

Date of advice: 6 September 2024

Ruling

Subject: Residency

Question

Are you residents of Australia for tax purposes?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

XX XXXX 20XX

Relevant facts and circumstances

This ruling applies to Person A and Person B (jointly referred to as you).

You were born in Australia.

You are Australian citizens and do not hold citizenship in any other country.

In 20XX, Person B purchased your family home (the Property). This is the only property you own in Australia.

In 20XX, Person A commenced working for Company A as a project manager.

In 20XX, Person A was offered an internal secondment by their employer Company A to complete a project in Country A.

The maximum contract term duration is X years. There is no option to extend the X-year contract. Once completed, Person A will return to Australia to resume their substantiative role within Company A.

Prior to departure, Person B resigned from their employment in Australia.

In 20XX, you listed the Property for sale. The Property has not been sold yet and remains vacant.

You engaged a buyer's agent in Australia to find you an alternative residence when you return in 20XX.

Prior to departure, you sold the cars you owned in Australia.

In 20XX, you activated a suspension with your private health insurance provider. You suspended for the maximum time frame of X years acting on their advice. You will confirm your return as soon as you are back in Australia to reinstate your insurance coverage.

You did not inform the Australian Electoral Commission or Medicare that you were departing Australia. You also did not inform any financial institutions that you are foreign residents.

Prior to departure, Person A was President of your local junior rugby league club.

You own the following assets in Australia:

•         Bank account B.

•         Bank account C.

•         You contribute to a growth bond.

•         Person B owns shares in public Australian companies, from which they receive dividends.

On XX XXXX 20XX, you and your family departed Australia.

Company A moved some of your furniture to Country A. Person A has a clause in their contract that Company A will arrange for the furniture to be transported back to Australia at the conclusion of your contract. The remainder of the furniture and items of sentimental value were left in a shipping container or with friends.

You have provided the following information regarding your work permits in Country A:

•         Person A has a sponsored temporary work permit.

•         Person B has a spouse work permit.

•         Your children's permits are connected to person A's permit.

•         Company A provided all permits.

•         All work permits are valid until XXXX 20XX.

You do not intend on applying for citizenship or permanent residency in country A.

You do not own any property in Country A. You are renting and your current lease will expire on XX XXXX 20XX. All mail is sent to this Country A address.

You own the following assets in Country A:

•         Bank account A.

•         Company A shares, which were provided as a performance incentive.

On XX XXXX 20XX, Person B started working at Company B as a Human Resources Manager in Country A.

Your family and friends all reside in Australia.

You enrolled your eldest child in a school in Country A, which offers the same subjects as in Australia. This will allow for the completion of the HSC.

Apart from your professional connections, you do not intend to develop any formal social or sporting connections in Canada.

For the duration of the secondment, you do not intend to return to Australia. You will take the opportunity to travel in Country A and Country B. When travelling within Country A you will list your Country A address and state you are temporary Country A residents. While travelling in Country B you will use your Australian passport and state you are Australian citizens. Your extended family will visit you in Country A.

You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990 or an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1).

Income Tax Assessment Act 1997 section 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 183 day test

•         The Commonwealth superannuation fund test.

We have considered your circumstances, and conclude that you will be a resident of Australia from 15 October 2023 to August 2026, as follows:

•         You are a resident of Australia according to the resides test.

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

•         You do not meet the 183 day test because you will not be in Australia for 183 days or more during the 2024, 2025 and 2026 income years. You will return to Australia in the 2027 income year and will be in Australia for more than 183 days.

•         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.