Edited version of private advice

Authorisation Number: 1052366028153

Date of advice: 24 February 2025

Ruling

Subject: Residency of Australia for taxation purposes

Question 1

Were you a resident of Australia for taxation purposes for the relevant income year.

Answer 1

No.

Question 2

Will you be a resident of Australia in the relevant income year until you return to Australia?

Answer 2

No.

Question 3

Will you be a resident of Australia for taxation purposes if you return to Australia permanently?

Answer 3

Yes.

Question 4

Will you be taxed on your Country Z income in Australia if you return to Australia permanently?

Answer 4

No.

This ruling applies for the following period:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Australia.

You are a citizen of Australia.

You are a permanent resident of the Country Z which was granted a couple of years ago.

You left Australia for Country Z.

You had no intention of returning to Australia on a permanent basis.

You accepted an offer of employment with a company in Country Z.

You have a residence visa to enter Country Z.

This visa allows you to be in Country Z while you are employed.

Your employer provided you with a number of days of accommodation when you first arrived in Country Z, you then rented your own accommodation.

Your spouse joined you in Country Z in at the end of the year that you received your permanent residency.

You made several trips back to Australia.

Your spouse also made a number of trips back to Australia.

In Country Z, your spouse joined a social group, and you have an ongoing membership with a social club.

Upon leaving Australia you closed all your Australian bank accounts, rolled out of your SMSF to a public fund.

Both you and your spouse advised the Australian Electoral Commission (AEC), that you were residing overseas indefinitely, the letter from the AEC you received is headed Notice of Removal of Name from Electoral Roll.

Your spouse does not work in Country Z.

You have the following assets and associations in Australia:

•                     A trust, that holds shares in an Australia Pty Ltd company. You and your spouse were the individual trustees of the Trust, when you left Australia you resigned as Trustee, and when your spouse left Australia, they retained their Trusteeship and another person who resides in Australia was appointed as Trustee to the Trust.

•                     An Australian Pty Ltd trading company, which your spouse worked as a manager within and derived wages from, until they moved overseas, when that employment as a manager ceased. They are also a Director of this Company too, along with a number of other individuals who all reside in Australia. A couple of years ago the decision to sell the Company as a whole or the business which the Company ran was decided, arrangements were made, and a number of parties have been interested in the business since, recently a formal offer to buy the business was made by a 3rd party. As this is a sensitive business matter, your spouse stayed on as a director of this trading Company and will continue in that role until the sale is completed.

•                     An Australian Pty Ltd investment company, you and your spouse were Directors of this company and you resigned when leaving Australia.

Another person now acts as Director of this company.

You and your spouse and your Trust are the shareholders of this company. Management of this investment company is quite simple as only a small holding in a couple of listed company share holdings are held by this investment company.

The house that you and your spouse resided in before they both left Australia has been rented out, and a property manager manages the property on their behalf.

The SMSF has a Trustee Pty Ltd Company, whilst you were a member of the SMSF you were a director of that company and resigned when your SMSF interest was rolled over. Your spouse, as they still has a SMSF interest, they are the sole member of that SMSF, they are a Director of that Trustee Company, along with another individual, so there are multiple individual Directors of this Trustee Company.

Just prior to the offer of employment in Country Z, and the decision to move overseas, you had entered a motor vehicle purchase contract, which you then cancelled upon deciding to move overseas.

Neither you nor your spouse own a vehicle located in Australia.

Your employment with the Country Z company has ceased.

You are currently looking for more work in Country Z.

If you are unable to find more work in Country Z, you will return to Australia to live.

Neither you nor your spouse are eligible to contribute to the PSS or the CSS Commonwealth super funds.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 subsection 995-1(1)

Reasons for decision

Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.

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 are not a resident of Australia for tax purposes for the relevant income years as follows:

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

You went to Country Z on a permanent basis a couple of years ago.

You have been working in Country Z.

•                     You do not meet the domicile test.

The Commissioner is satisfied that you have a permanent place of abode outside Australia in Country Z.

•                     You will not meet the 183-day test.

You do not fulfil the requirements of the Commonwealth superannuation fund test.

You are not a resident of Australia for taxation purposes for the relevant income years.

You will resume being a resident of Australia for taxation purposes if you return to Australia on a permanent basis.

You will not be taxed on your Country Z income in Australia if you resume your residency status in Australia by returning to Australia on a permanent basis.

For the period you are in Country Z you will only be taxed on your Australian sourced income in Australia.