Edited version of private advice

Authorisation Number: 1052392143252

Date of advice: 26 June 2025

Ruling

Subject: Residency

Question 1

Are you a resident of Australia for tax purposes as defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936)?

Answer 1

No.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

XX XX 20XX

Relevant facts and circumstances

You were born in Australia on XX XX 20XX. You are an Australian citizen.

In 19XX you left Australia to travel to Country B.

In 19XX you married your Country B born spouse and gained permanent residency status in Country B.

In 19XX you returned to Australia with your spouse to work a horse stable where you worked permanently until 19XX.

On XX XX 20XX you became a citizen of Country B.

You hold dual passports with Australia and Country B.

You have an adult child who has dual citizenship with Australia and Country B.

You intend to reside in Country B with your spouse for the foreseeable future.

All your siblings, extended family and many friends reside in Australia. Your parents also resided in Australia until their death.

You have a significant connection with horse racing.

You are in regular contact with horse racetracks and on each visit to Australia you attend these Australian tracks.

You have been a member of the XX since 19XX.

You are retired but occasionally work part time at a racetrack located in Country B.

Although retired, you work X hours per week as a tour guide when in Country B. It is not a permanent job and you can stop at any time. You state this is convenient for you.

You reside at a property located in Country B with your spouse, which you jointly own.

You travel to Australia with your spouse on an average of X each year. During these visits you stay with your family.

Your Country B property remains vacant during your return trips to Australia.

You also visit relatives, business associates, friends and racetracks on each trip. These visits are usually for multiple weeks, but your time in Australia in recent times does not total 183 days in any one year.

You usually stay with family and friends when you return to Australia.

You travelled with your spouse to Australia in 20XX, 20XX and 20XX, for a total of X months. You plan to return in XX 20XX for a further X months, other trips are not yet decided.

During the 20XX income year you spent less than 183 days in Australia.

You jointly own agricultural property in Australia with your brother with whom you are in an Australian business partnership agreement.

You do not own a home in Australia.

You hold a bank account in Australia and you are receiving interest on your deposits. You pay accounts from your Australian bank account.

You have two banking accounts in Country B.

You have two mailing address one in Australia and the other in Country B.

You have not removed yourself from the Australian electoral roll.

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.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

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

Reasons for decision

Overview of the law

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.

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.

To determine your residency status, it is appropriate to look beyond the period you have spent in (or out of) Australia. Factors from the entire income year and surrounding income yearsprovide more information to help determine whether you meet one of the residency tests.

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 not a resident of Australia under the resides test for the 20XX income year based on the following:

•                during the ruling period you were physically present in Australia for XX days

•                your stated purpose when visiting Australia is to visit relatives, business associates, friends and racetracks

•                your spouse accompanies you to Australia

•                you stay with family and friends while in Australia

•                your visits are usually for multiple weeks and your time here in recent times has not totalled 183 days in any one year

•                your behaviour while in Australia is consistent with a temporary visit

•                you own a home in Country B where you primarily reside with your spouse

•                you have retained business ties with Australia through a partnership with your brother

•                you jointly own agricultural property in Australia

•                you do not own a home in Australia

•                you maintain banking accounts in Country B and Australia

•                your assets and belongings are primarily located in Country B.

Having considered the relevant facts, including the purpose of your visits and the limited number of days you have spent in Australia, we do not consider your circumstances to be consistent with residing in Australia.

You may still be an Australian resident if you meet the conditions of one of the other tests (the domicile test, 183 day test and Commonwealth superannuation fund test).

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.

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

It is considered that you abandoned your domicile of origin in Australia and acquired a domicile of choice in Country B in 20XX based on the following:

•                you became a permanent resident of Country B in 19XX

•                you received Country B citizenship on XX XX 20XX

•                you have been living and working in Country B predominantly since 19XX

•                you intend to continue residing in Country B, when not in Australia, for the foreseeable future.

Your domicile of choice is 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 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 have not been present in Australia for 183 days or more during the 20XX income year. Therefore, you are not a resident under this test.

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

As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the year ended 30 June 20XX.