Edited version of private advice

Authorisation Number: 1052379288627

Date of advice: 20 May 2025

Ruling

Subject: Residency

Question

Were you an Australian resident for the period X July 20XX to XX June 20XX?

Answer

Yes.

This private ruling applies for the following periods:

Year ending XX June 20XX

Year ended XX June 20XX

The scheme commenced on:

X July 20XX

Relevant facts and circumstances

You were born in Country B before moving to Australia in April 20XX with your spouse and children.

You entered Australia on a visa.

The visa allowed you to stay in Australia permanently.

You received Australian citizenship in March 20XX.

You commenced working for an Australian company ('Company A') in November 20XX.

Your employment with Company A ended in September 20XX.

In December 20XX, you received a job offer from Company B in Country C.

You obtained a work visa for Country C in 20XX and moved to Country C with your spouse and children. The work visa is valid for X years with indefinite renewal options.

You intended to apply for a permanent visa and remain in Country C for over X years.

In January 20XX, your employment with Company B ended.

You returned to Australia in January 20XX.

You established a business in January 20XX. The business has not generated any income as at the date of this ruling.

You have not secured employment in Australia since returning from Country C.

In 20XX, prior to moving to Country C, you purchased the Property and resided there with your spouse and children.

You rented a property in Country C until your return to Australia.

Whilst residing in Country C, the Property was rented out and remains tenanted as at the time of this ruling.

You sought a sale appraisal of the Property in February 20XX.

You have been residing in hotels since returning to Australia.

You have some friends in Australia through sporting teams.

You have family residing in both the Country C and Country A.

Whilst living in Australia, you retained a 'life insurance policy' in Country A. Additionally, you owned the Property, secured by a home loan, held bank accounts and owned a used car.

Whilst residing in Country C, you held bank accounts, a share trading account, a retirement savings account, and some household effects which remained with friends located in Country C when you returned to Australia.

When you moved to Country C, you requested a postal ballot but did not remove your name from the Australian electoral role. You also cancelled your family hospital cover with Australian health insurance.

You lodged a tax return for the 20XX fiscal year in Country C.

You did not lodge an Australian tax return for the time you were residing in Country C.

When you left Australia for Country C, you listed 'work' as the reason for going overseas on the Australian 'Immigration Outgoing Passenger' card.

You have advised that if you cannot secure employment in Australia, you may relocate overseas again.

You re-enrolled your children in an Australian school upon returning from Country C.

Relevant legislative provisions

Income Tax Assessment Act 1936 section 6(1)

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

Summary

You satisfy the resides, domicile, and 183 day tests of residency and so are a resident of Australia for income tax purposes for the year ended X June 20XX.

You satisfy the resides and domicile test of residency and so are a resident of Australia for income tax purposes for the year ending XX June 20XX.

Detailed reasoning

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 4 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.

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'.

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 (the domicile test, 183-day test and Commonwealth superannuation fund test).

Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

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

The resides test

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 observations contained in the case of Hafza v Director-General of Social Security (1985) 6 FCR 444 are also important:

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248; and Keil v Keil [1947] VLR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 235... here the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.

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

You are a resident of Australia under the resides test for the period X July 20XX to XX June 20XXbased on the following:

•                     You resided in Country C for X months and retained assets in Australia.

•                     You have started a business in Australia.

•                     You have re-enrolled your children in school in Australia.

•                     You own property in Australia and retained it while you were living in Country C.

•                     You retained bank accounts in Australia.

•                     You did not remove your name from the Australian electoral role.

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

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 Country A and your domicile of origin is Country A. You immigrated to Australia in 20XX and became an Australian citizen in 20XX.

We consider that you abandoned your domicile of origin in 20XX and acquired a domicile of choice in Australia.

Therefore, your domicile is Australia.

Permanent place of abode

If you have an Australian domicile, you are an Australian resident unless the Commissioner is satisfied that your permanent place of abode is outside Australia. This is a question of fact to be determined in light of all the facts and circumstances of each case.

'Permanent' does not mean everlasting or forever, but it is to be distinguished from temporary or transitory.

The phrase 'permanent place of abode' calls for a consideration of the physical surroundings in which you live, extending to a town or country. It does not extend to more than one country, or a region of the world.

The Full Federal Court in Harding v Commissioner of Taxation [2019] FCAFC 29 held at paragraphs 36 and 40 that key considerations in determining whether a taxpayer has their permanent place of abode outside Australia are:

•                     whether the taxpayer has definitely abandoned, in a permanent way, living in Australia.

•                     whether the taxpayer is living in a town, city, region or country in a permanent way.

The Commissioner considers the following factors relevant to whether a taxpayer's permanent place of abode is outside Australia:

•                     the intended and actual length of the taxpayer's stay in the overseas country.

•                     whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or to return to Australia at some definite point in time.

•                     whether the taxpayer has established a home (in the sense of dwelling place; a house or other shelter that is the fixed residence of a person, a family, or a household), outside Australia.

•                     whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence.

•                     the duration and continuity of the taxpayer's presence in the overseas country.

•                     the durability of association that the person has with a particular place in Australia, i.e. maintaining assets in Australia, informing government departments such as the Department of Social Security that he or she is leaving permanently and that family allowance payments should be stopped, place of education of the taxpayer's children, family ties and so on.

As with the factors under the resides test, no one single factor is decisive, and the weight given to each factor depends on the individual circumstances.

Application to your situation

The Commissioner is not satisfied that your permanent place of abode is outside Australia because:

•                     You own property in Australia and retained it while you were living in Country C.

•                     You retained Australian bank accounts while in Country C.

•                     You listed 'work' as the reason for going overseas on the Australian 'Immigration Outgoing Passenger' card.

•                     You rented a property in Country C on a XX month basis.

Therefore, you are 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 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 not present in Australia for 183 days or more during the 20XX income year. Therefore, you are not a resident under this test.

You have been in Australia for 183 days or more in the 20XX income year. Therefore, you will be a resident under this test unless the Commissioner is satisfied that your usual place of abode was outside Australia, and you do not have an intention to take up residence in Australia.

Usual place of abode

In the context of the 183-day test, a person's usual place of abode is the place they usually live and can include a dwelling or a country. A person can have only one usual place of abode under the 183-day test. However, it is also possible that a person does not have a usual place of abode. This is the case for a person who merely travels through various countries without developing any strong connections.

If a person has places of abode both inside and outside Australia, then a comparison may need to be made to determine which is their usual place of abode. When comparing two places of abode of a particular person, we will examine the nature and quality of the use which the person makes of each particular place of abode. It may then be possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the person's usual place of abode: Emmett J at [78] in Federal Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836.

Application to your situation

The Commissioner is not satisfied that your usual place of abode was outside Australia for the relevant income years based on the following:

•                     You rented a property in Country C on a XX month basis

•                     You retained ownership of your Australian property

•                     You did not request the Australian Electoral Commission remove your name from the electoral role

Intention to take up residency

To determine whether you intend to take up residence in Australia, we look at evidence of relevant objective facts. 'Intend to take up residency' does not merely mean intend to stay for a long time. It means intending to live here in such a manner that you would reside here.

Application to your situation

The Commissioner is satisfied that you did intend to take up residence in Australia for the relevant income year because:

•                     You are a citizen of Australia

•                     You retained ownership of your Australian property

•                     You did not request the Australian Electoral Commission remove your name from the electoral role

•                     You started an Australian business upon your return from Country C

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 member on behalf of whom contributions are being made to 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.

Conclusion

You satisfy the resides, domicile, and 183 day tests of residency and so are a resident of Australia for income tax purposes for the year ended X June 20XX.

You satisfy the resides and domicile test of residency and so are a resident of Australia for income tax purposes for the year ending X June 20XX.