Edited version of private advice

Authorisation Number: 1052328801830

Date of advice: 10 December 2024

Ruling

Subject: Residency

Question

Will you be a tax resident of Australia as defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for income years ended 30 June 20XX?

Answer

Yes.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

On XX XX 20XX, you moved to Country A with your family.

You are an Australian citizen and lived in Australia before your departure to Country A.

You intend to stay in Country A for an additional year.

You have bought a 3-bedroom apartment in Australia where you and your family intend to live when you move back to Australia.

Since your last private ruling you have visited Australia for several weeks.

Background information

You work for own company. It is an Australian company and operates in Australia. It employs you and other Australian employees.

You are currently working remotely for the company in Country A.

Your spouse is a citizen of Country A, and they are a permanent resident of Australia. You intended to return to Australia with your family by XX XX 20XX. However, you and your spouse are expecting a second child and decided to extend your stay in Country A until XX 20XX.

While in Country A you want your children to be exposed to Country A language and culture.

Connection with Australia

Your extended family live in Australia.

Since XX XX 20XX, you have been managing your company's business.

Upon your recent return to Australia, you conducted meetings with your business network. You attended the office of the company three to four times a week to have meetings and gatherings with employees.

Your plan is to visit Australia once a year for around a month to connect in person with your employees.

Your spouse is a permanent resident in Australia, and she works for your company. They plan on remotely working for the company while they are in Country A.

You are director of multiple Australian based entities.

Before you relocated to Country A you were living at your parents' house in Australia. Your parents own the house, and your plan was to stay there when you returned from Country A.

Your plan is to have your children attend day care in Australia upon your family's eventual return to Australia and to have them commence primary school in Australia. You previously had not yet decided where you will live when you return to Australia, and you have not yet registered them in a day care centre.

You do not have any membership of a club or association in Australia.

You have a mobile phone plan in Australia. For internet use, you access your mobile phone's data plan.

You pay for utilities such as water usage for all the properties that you own in Australia.

You have maintained your Medicare card.

For several years, you have held, and continue to hold, an Australian health insurance policy.

Assets and Investments in Australia

You are a shareholder of several Australian companies.

You hold numerous bank accounts in Australia.

You have superannuation with an Australian Super Fund.

You own four properties in Australia.

Your furniture is stored in one of your company's warehouses and your possessions are stored at your parents' house as you plan on re-using the furniture when you move back to Australia.

Connection with Country A

When you first visited Country A in XX 20XX, you travelled on a partner (spouse) visa issued by the Country A government. Since this time, your partner visa expired after a year. You have been travelling every few months to other overseas countries (including Australia) and have been using a temporary visa for re-entering Country A each time instead of renewing your partner visa.

You are not employed by an entity in Country A.

In Country A you rent and live in an apartment and work remotely from this address. This is the address you that you use for your mail.

You do not own a property in Country A.

You do not have any membership of a club or association in Country A.

You are currently paying for the use of electricity in Country A.

Assumption

You intend to move back to Australia by the end of the 20XX income year.

You will not be in Australia for 183 days or more in the 20XX income year.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

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.

We have considered your circumstances and conclude that you are a resident of Australia for the 20XX income year under the resides and the domicile tests.

Our consideration of each test follows:

You are a resident of Australia according to the resides test even though you will be in Australia for a limited time because:

• you maintain a continuity of association to Australia through the company you own
• you previously held a partner (spouse) visa in Country A which expired after a year and re-entered on a temporary visa
• your personal connection to your employees when visiting Australia
• you have no employment ties to Country A
• your company and property investments in Australia
• the storage of your personal assets to be available to you upon you and your family's return to Australia
• your bank accounts in Australia to transfer money to Country A
• the maintenance of your private health insurance and mobile phone plan in Australia
• you purchased an apartment in Australia intending to live there when you return to Australia
• it has always been your intention to return to Australia with your family and you consider Australia your home

You are a resident of Australia for tax purposes under the domicile test as:

• you did not abandon your domicile of origin or domicile of choice (Australia) and acquire a domicile of choice in Country A
• you are not entitled to reside indefinitely in Country A as you only stay in the country under a temporary visa
• the Commissioner is not satisfied that your permanent place of abode is outside Australia
• you have not definitely abandoned your residency in Australia as you will be returning with your family to live in an apartment you purchased in XX 20XX, and you do not intend to commence living permanently overseas.

You do not meet the 183-day test because you will not be in Australia for 183 days or more during the relevant income year.

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.