Edited version of private advice

Authorisation Number: 1052319041559

Date of advice: 18 October 2024

Ruling

Subject: Residency

Question 1

Are you a resident of Australia for tax purposes for the years ended 30 June 20XX and 20XX?

Answer

Yes.

Question 2

Are you a resident of Australia for tax purposes for the year ended 30 June 20XX?

Answer

No.

Question 3

Are you a resident of Australia for tax purposes for the year ended 30 June 20XX?

Answer

Yes, from the date of your arrival in Australia.

This private 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:

1 July 20XX

Relevant facts and circumstances

Basic facts and background

Your country of origin is foreign country A. Your date of birth is XX XXXX 19XX.

In XXXX 19XX, you migrated from foreign country A to foreign country B with your family. You became a citizen of foreign country B.

On the XX XXXX 20XX you received your foreign country A passport while in foreign country B. You were later informed by the foreign country A embassy that you cannot possess dual citizenship. You chose to keep your foreign country B citizenship. You lost your foreign country A citizenship.

In XXXX 20XX, prior to your arrival in Australia, you opened an Australian bank account, on the advice of an immigration agent.

You have entered Australia more than once, first in 20XX and then again in 20XX.

Your past travel movements

From 19XX to 20XX you lived in foreign country B.

On XX XXXX 20XX, you and your foreign country B partner arrived in Australia from foreign country B on their work visa. They received a job offer with a relocation package. Your visa was active as long as your partner was working for the company. There was never an intention to live permanently in Australia because your partner agreed only to move to Australia for a couple of years to experience living overseas. The plan was to go back to foreign country B after a couple of years because both of your families are living there.

You departed Australia on XX XXXX 20XX.

You arrived in Australia on XX XXXX 20XX.

On XX XXXX 20XX, following the relationship breakdown, you were informed by the Department of Home Affairs of a Notice of Intention to consider cancellation of your visa. You then attempted to get a review of this decision.

On XX XXXX 20XX, you were granted a second visa with the right to work in Australia whilst appealing the cancellation of your first visa.

On XX XXXX 20XX you departed Australia. Due to your relationship breakdown with your foreign country B partner, your visa was cancelled. You were facing deportation back to foreign country B (during Covid-19) so you moved to foreign country C with your new Australian partner so you could apply offshore for third visa.

In XXXX 20XX, you were granted a third visa.

From XX XXXX 20XX you arrived in Australia with your Australian partner using your third visa. You couldn't get back to Australia during Covid-19 without that visa. Only residents and citizens were allowed to enter Australia. You lived in rented accommodation.

From XX XXXX 20XX to XX XXXX 20XX you lived in foreign country D; for X months. You wanted to see if you and your partner would like to live long term in X. You did not like it, because you could not get a job there without knowing the local language.

From XX XXXX 20XX to XX XXXX 20XX you lived in foreign country C; for X years. You moved there for the culture, safety and the lower living costs and you can get by easily with just English.

Your current and future travel movements and intentions

In XXXX 20XX you applied for a fourth visa.

On the XX XXXX 20XX, you received news that a relative was ill. They were taken to hospital. You flew to foreign country B fromforeign country C and stayed there for X weeks to look after the relative. If something happens, you may need to travel to foreign country B frequently.

On XX XXXX 20XX, you returned to Australia on the fourth visa. You did not originally intend to reside in Australia permanently and are not certain of your residency intentions just now. However, you recognize how fortunate you are to have been granted Australian residency and do not take this opportunity lightly. Therefore, you wish to fully explore the prospect of establishing a long-term life here.

You have supporting documents in the form of four letters from the Department of Home Affairs.

When completing the incoming passenger card the address you put would normally be the local residency address as most countries require you to state this. Your residency status you would state is foreign country B.

For any legal or financial institutions or companies in foreign country B, you have been stating your relative's address in foreign country B, and that that you are a foreign country B resident.

You are not a resident of any other foreign country for taxation purposes, except in foreign country B because you are a citizen of foreign country B. However, in foreign country B there has been no income from the date you left the country.

You have not lodged any foreign income tax returns while living in Australia.

You do not plan to sponsor any of your family members to move to Australia. They are citizens of foreign country B and are not interested in leaving foreign country B and living overseas.

Family and social connections

Your spouse/partner is an Australian citizen. They were born on XX XXXX 19XX.

You have no dependents.

None of your family accompanied you to Australia. You do not financially support them. They live in a rented apartment in foreign country B.

You have not developed any professional, social or sporting connections in Australia.

You have not maintained any professional, social or sporting connections in foreign country B.

Your driving license is foreign country B.

You did not inform the Australian Electoral Commission, Medicare or any other government institute that you were departing Australia.

When departing Australia, you do not remember if you advised your private health insurance (PHI) provider to have your policy suspended or cancelled.

Accommodation in Australia

You stayed in the rented accommodation while in Australia, at several locations.

You stayed in the rented accommodation in foreign countries C and D, at several locations.

You have supplied copies of all your lease contracts for all your places of accommodation.

Prior to your arrival in Australia in 20XX, you were living with you're a relative in foreign country B, in an apartment they rent.

Your mailing address when living in Australia is your actual living address. When you were living in foreign country C or foreign country D you used your relative's address in foreign country B.

Assets

You have a bank account in foreign country B with an ongoing monthly loan payments that ends in XX XXXX 20XX.

Since XX XXXX 20XX, you have had a bank account in foreign country C.

You have no investments or property anywhere.

You have a bank account in Australia, but no other assets.

Prior to your departure from foreign country B, your household effects were sold or given away to friends and family.

You have been keeping all your personal belongings, such as your childhood photo albums and your stamp collection, at your relative's home in foreign country B.

You do not have investments in Australian financial institutions or any Australian companies. You only hold one bank account in Australia and do not have any investments anywhere.

Income and employment

You receive income from sources outside of Australia. Your employment is X and you perform the work remotely. You perform your services as an independent contractor and not as an employee. You work as an X for X and X. The X are based outside of Australia. The type of work performed is X and X. You did this from 20XX to 20XX. The employment has been extended. It is an ongoing independent contract, there's no employee/employer relationship: you can decide to work or not work, there's no obligation.

You do not have an employment position or job being held for you in any overseas country.

Neither you nor your spouse/partner is a Commonwealth of Australia Government employee for superannuation (super) purposes. You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990. You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976. You are not the spouse or a child under 16 of a person who is a member of the PSS or an eligible employee in respect of the CSS.

You do not undertake any courses of study.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

Question 1

Are you a resident of Australia for tax purposes for the years ended 30 June 20XX and 20XX?

Question 2

Are you a resident of Australia for tax purposes for the year ended 30 June 20XX?

Question 3

Are you a resident of Australia for tax purposes for the year ended 30 June 20XX?

Summary

You were a resident of Australia for taxation purposes during the 20XX/XX and 20XX/XX income years under resides and 183-day residency tests.

You were not a resident of Australia for taxation purposes during the 20XX/XX income year under any of the four residency tests.

You are a resident of Australia for taxation purposes during the 20XX/XX income year under resides test from the date you arrived back in Australia on XX XXXX 20XX.

Detailed reasoning

Resident of Australia for taxation purposes

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 (ordinary concepts) test,

•         the domicile test,

•         the 183-day test, and

•         the superannuation test.

The primary test for deciding the residency status of an individual is whether they reside in Australia according to the ordinary meaning of the word resides.

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.

We have considered the above tests in relation to your situation as follows:

The resides (ordinary concepts) test

Under the ordinary concepts test, you are a resident if you reside in Australia. The term 'reside' is not defined in the Australian income tax law and has its ordinary meaning. The ordinary meaning 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'.

The ordinary concepts test is asking whether your presence in Australia is usual and settled in contrast to temporary and casual. This is informed by both the nature, duration and quality of the person's physical presence and an intention to treat Australia as home. Factors that commonly inform the relevant association with Australia are:

•         period of physical presence in Australia

•         intention or purpose of presence

•         behaviour while in Australia

•         family, and business or employment ties

•         maintenance and location of assets, and

•         social and living arrangements.

These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

It is important to note that not one single factor is decisive, and the weight given to each factor depends on each individual's circumstances.

Because the ordinary concepts test is whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Any connection with another country does not diminish a connection to Australia; that is, the test is not about dominance or exclusivity.

Application to your situation

We have taken the following into consideration when determining whether you met the resides test:

•         Physical presence. You were physically present in Australia from your first arrival on XX XXXX 20XX (except for a brief trip overseas from XX XXXX 20XX to XX XXXX 20XX) until XX XXXX 20XX when, due to your relationship breakdown with your foreign country B partner, your visa was cancelled and you went to foreign country C to apply for a new visa so you could return to Australia. You returned to Australia on XX XXXX 20XX with your Australian partner on a new visa. On XX XXXX 20XX you departed Australia to live first in in foreign country D then in foreign country C and not return to Australia until XX XXXX 20XX.

•         Intention or purpose. Initially, your purpose in coming to Australia was to experience living overseas for a few years then to go back to Israel. However, you now wish to fully explore the prospect of establishing a long-term life in Australia.

•         Behaviour. For the 20XX/XX and 20XX0XX2 income years, your behaviour in Australia showed that, though you lived in several locations in rented accommodation, you had a degree of continuity, routine or habit that is consistent with residing in Australia. Your behaviour supports your stated intention to reside in Australia during those two income years. For the 20XX/XX you did not reside in Australia at any time and in the 20XX/XX income year you were in Australia for only four days.

•         Family and business/employment ties. You lived in Australia first with your foreign country B partner and now with your Australian partner. Your employment is X and you perform the work remotely. You perform your services as an independent contractor. The type of work performed is X and X. The X are based outside of Australia.

•         Maintenance and location of assets. You keep personal belongings, such as your childhood photo albums and your stamp collection, at your relative's home in foreign country B. You do not have any investments anywhere. You have a bank account in Australia.

•         Social and living arrangements. You lived in Australia first with your foreign country B partner and now live with your Australian partner in rented accommodation.

You have family ties remaining in foreign country B. You had established your life in Australia during the 20XX/XX and 20XX/XX income years. During that time you displayed behaviour consistent with someone residing in Australia.

During the 20XX/XX income year you did not reside in Australia at any time and in the 20XX/XX income year you were in Australia for only X days. You lived overseas for this time with your Australian partner and maintained no connection to Australia until you returned on XX XXXX 20XX. For this period you have not displayed behaviour consistent with someone residing in Australia.

Upon your return to Australia on XX XXXX 20XX, you lived with your Australian partner briefly in a hotel and from X XXXX until now, in a rented unit. From the date of your return, you displayed behaviour consistent with someone residing in Australia.

Therefore, we consider that you were a resident of Australia during the 20XX/XX and 20XX/XX income years. You were not a resident during the 20XX/XX income year or in the 20XX/XX income year until you returned to Australia on XX XXXX 20XX.

Although the law only requires you to be considered a resident under one test, for completeness the other tests are considered.

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.

In Australia, the concept of domicile is governed by common law as modified by the Domicile Act 1982.

Domicile considers whether there is a legal relationship between a person and Australia. There are 3 types of 'domicile':

•         A 'domicile of origin', which is attributed to each individual at birth.

•         A 'domicile of dependence', which is relevant where a person (such as a minor) lacks capacity to acquire their own domicile and their domicile is determined by reference to someone else's domicile (such as a parent).

•         A 'domicile of choice', which is the domicile a person, with the capacity to do so, acquires voluntarily.

You always have a domicile and you can only have one domicile at any point in time. Your particular domicile continues until you acquire a different one, either by choice or operation of the law. You cannot abandon a domicile of origin without replacement.

To acquire a domicile of choice you must have both lawful physical presence in a foreign country and an intention to make your home indefinitely in that country.

When considering intention, we have regard to objectively observable conduct. While assertions of intention will always be relevant, if there is a difference between that assertion and the conduct, we may rely on the conduct.

Obtaining a visa to migrate to a particular country would be consistent with an intention to make your home indefinitely in that country. A working visa, even for a substantial period of time, would usually not be sufficient evidence of an intention to acquire a new domicile of choice.

Application to your situation

In your case, your domicile of origin is foreign country A. You migrated to foreign country B. You became a foreign country B citizen and lost your foreign country A citizenship. Consequently, there is sufficient evidence to demonstrate that you have acquired a domicile of choice in foreign country B. You are not planning to become an Australian citizen.

Therefore, your domicile is still foreign country B and you are not a resident of Australia under the domicile test.

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 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

For the income year ended 30 June 2021 you were in Australia for X days.

For the income year ended 30 June 2022 you were in Australia for X days.

You have been in Australia for 183 days or more during these two income years, so you are a resident under the 183-day test unless the Commissioner is satisfied that your usual place of abode was outside Australia, and you did not have an intention to take up residence in Australia.

Your usual place of abode is the place you usually live. Based on the facts as set out in the ruling, it is clear your usual place of abode was in Australia where you and your Israeli partner lived in rented accommodation at several locations. Although you departed Australia on XX XXXX 20XX, this was due to your relationship breakdown with your foreign country B partner and, in consequence, the cancellation of your visa. You travelled to foreign country C and lived in rented accommodation. While there you took steps to obtain a replacement visa so you could return to Australia which you subsequently did, with your Australian partner, on XX XXXX 20XX. You lived with them in rented accommodation. Your lifestyle in Australia, coupled with your time away from the foreign country B prior to coming to Australia demonstrates you did not have a usual place of abode overseas during these two income years.

Furthermore, it is noted that your intention was to take up residence in Australia for a few years, though not permanently.

Therefore, you are viewed as being a resident of Australia under this test for the income years ended 30 June 20XX and 20XX. This is because you have been here for more than 183 days in these income years and the Commissioner has not reached the relevant state of satisfaction that your usual place of abode was overseas.

For the income year ended 30 June 2023 you were in Australia for X days.

For the income year ended 30 June 2024 you were in Australia for X days.

You have not been in Australia for 183 days or more during these two income years, so you are not a resident under the 183-day test for the income years ended 30 June 20XX and 20XX.

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.

This test will not apply if the individual is a member of the Public Sector Superannuation Accumulation Plan (PSSAP) and the test will only apply to members of the PSS and CSS which are now closed to new members.

Application to your situation

You are not a contributing member of the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) or a spouse of such a person, or a child under 16 of such a person. Therefore, you are not a resident under this test.

As outlined above, for the ruling period the Commissioner accepts that you were a resident of Australia for taxation purposes under the resides test and the 183-day test for the 20XX/XX and 20XX/XX income years. Under the resides test, the Commissioner regards you as residing in Australia according to ordinary concepts. Under the 183-day test the Commissioner is not satisfied that you had a usual place of abode outside Australia and that you do not intend to reside in Australia during that time.

You were not a resident of Australia for taxation purposes during the 20XX/XX income year under any of the four residency tests.

You are a resident of Australia for taxation purposes during the 20XX/XX income year under the resides test from the date you arrived back in Australia on XX XXXX 20XX. Under the resides test, the Commissioner regards you as residing in Australia according to ordinary concepts from this date.