Edited version of private advice

Authorisation Number: 1052399783694

Date of advice: 11 June 2025

Ruling

Subject: Residency

Question

From the date you depart Australia until XXXX 20XX, are you an Australian tax resident as defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936)?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

XX XXXX 20XX

Relevant facts and circumstances

Your country of origin is Australia and are an Australian citizen.

Your Parent 1 was born in the Country A, making you also a citizen of the Country A.

All your extended family reside in Australia.

Your parents live in Australia.

You are currently not a resident of any other country for tax purposes.

You do not own your home in Australia.

You have the following Australian assets:

•                     2 bank accounts

•                     a superannuation account

•                     investments and shares.

Since XX XXXX 20XX, you have been employed full-time by Company A.

You work remotely for Company A in Australia.

You work remotely for Company A, with a requirement to attend Location A as requested. Your travel arrangements are ad-hoc, generally you would go to Location A for 3 days a month maybe every second month.

On XX XXXX 20XX, you entered a de facto relationship with Person A.

You have no dependants.

You and Person A rent property A in Australia.

From XX XXXX 20XX, your rental agreement became a periodic tenancy. You will maintain this periodic arrangement up until your departure date and will then utilise your parent 1 residence when you visit Australia.

On XX XXXX 20XX, Person A will be posted in Country B by their employer, Employer A.

When in Country B, Person A will be one a sponsored diplomatic visa supplied by Employer A.

Employer A will provide the subsidised accommodation for the duration of Person A's posting.

In or around XX XXXX 20XX, you will depart Australia and travel to Country B on a sponsored diplomatic visa to join Person A.

The visa is supplied by Employer A in connection with their posting and will allow you to stay in Country B until their posting concludes in XXXX 20XX.

Upon departing Australia, you will:

•                     Maintain your professional, social and sporting connections in Australia.

•                     Maintain private health coverage whilst away as you intend to utilise your existing doctors for routine medicals when back in Australia.

•                     Remain on the Australian Electoral Commission and Medicare.

•                     Store your household effects into storage.

•                     Store your personal effects at your parent 1 address.

•                     Have you mail forwarded to your parent 1 address.

•                     Sell your car.

You will stay in the accommodation supplied by Employer A.

You will not apply for citizenship or permanent residency in Country B.

You will potentially buy or lease a car in Country B.

You do not have any friends or established social or sporting connections in Country B.

You do not intend to join social or sporting clubs in Country B.

You may travel Country B for tourism.

While in Country B you will continue working remotely for Company A in your current position.

Company A agreed for you to maintain your role with travel back to Australia at a minimum quarterly a year and as required.

You will travel to Australia a minimum of 4 times a year for a duration of 2 to 4 weeks each time. You intend to travel back to Australia for work purposes and to maintain social connections with my family and friends.

When you travel to Australia you will stay in hotels when working and at your parent's individual addresses when you visit them.

There is a room set up exclusively for you and Person A at your parent 1 home. This room is always available to you. You do not pay your parent 1 to use this room.

When completing incoming and outgoing passenger cards you will state you are an Australian citizen.

You will not seek to obtain employment with foreign entities while you are Country B.

You do not currently own any assets outside of Australia.

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 will be physically present in Australia for 183 days or more during the income years ended 30 June 20XX.

You will not be physically present in Australia for 183 days or more during the income year ended 30 June 20XX.

You will be physically present in Australia for 183 days or more during the income years ended 30 June 20XX.

Assumptions

For the purpose of this ruling, it is assumed that the facts of your situation as outlined above will not materially change during the ruling period and will continue until 30 June 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1).

Income Tax Assessment Act 1997 section 995-1.

Reasons for decision

Summary

You satisfy the resides and domicile tests of residency for the duration of the ruling period. In addition, for the years ended 30 June 20XX and 20XX, you will satisfy the 183-day test.

Therefore, you are a resident of Australia for income tax purposes for the duration of the ruling period.

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 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.

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 from your departure date until January 20XX based on the following:

•                     period of physical presence in Australia

-             You will be physically in Australia until you depart in XXXX 20XX.

-             You will travel to Australia a minimum of 4 times a year for a duration of 2 to 4 weeks each time.

•                     intention or purpose of presence

-             Your intention is to return to live in Australia after Person A's posting

-             You are only staying in Country B due to Person A's posting

-             You consider Australia your permanent home.

•                     behaviour while in Australia

-             You intend to travel back to Australia to maintain social connections with many family and friends.

-             You must travel back to Australia for work purposes.

-             You have an exclusive room set up for you at your parent 1's residence.

•                     family and business/employment ties

-             Your employer is an Australian company, and you will work remotely for them in Country B.

-             You have always had an ad-hoc working remotely arrangement with your employer.

-             You will travel to Australia a minimum of 4 times a year for a duration of 2 to 4 weeks each time for work purposes.

-             Your family lives in Australia.

•                     maintenance and location of assets

-             You hold shares and investments in Australia.

-             You do not own residential property.

-             You will sell your car when moving to Country B.

-             You will store your household effects into storage.

-             You will store your personal effects at your parent 1's address,

•                     social and living arrangements.

-             You will travel to Australia to maintain social connections with my family and friends.

-             You do not have existing social, professional or sporting connections in Country B.

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

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 parent 1 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 Australia and your domicile of origin is Australia.

It is considered that you will not abandon your domicile of origin in Australia and acquire a domicile of choice in Country B. You were not entitled to reside in Country B indefinitely and while living in Country B, you hold a sponsored diplomatic visa connected with Person A's posting in Country B. After the posting you will return to 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] FCA 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 are only living in Country B for the duration of Person A's posting.

•                     You do not own any property in Country B.

•                     You are staying in accommodation supplied by Employer A in Country B.

•                     There is a room set up exclusively for you and Person A at your parent 1's Australian address. This room is always available to you. You do not pay your parent 1 to use this room.

•                     Upon departing Australia, you will:

-             Maintain private health cover whilst away as you intend to utilise your existing doctors for routine medicals when back in Australia.

-             Remain on the Australian Electoral Roll and retain current Medicare.

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 circumstances for the income years ended 30 June 20XX and 20XX

You will be in Australia for 183 days or more in the income years ended 30 June 20XX and 20XX. 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 will be outside Australia for the income years ended 30 June 20XX and 30 June 20XX based in the following:

•                     From XX XXXX 20XX, your rental agreement in Australia became a periodic tenancy. You will maintain this periodic arrangement up until your departure date in or around XX XXXX 20XX.

•                     You are required by your employment to be present in Australia for up to 4 times a year. During this time, you will utilise your parent 1's residence when you visit Australia.

•                     There is a room set up exclusively for you and Person A at your parent 1's home. This room is always available to you. You do not pay your parent 1to use this room.

•                     You will return to Australia in XXXX 20XX. When you return to Australia you stated you will buy property in Australia.

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 do intend to take up residence in Australia for the relevant income years because:

•                     You will stay in the accommodation supplied by Employer A in Country B.

•                     You do not intend to apply for citizenship or permanent residency in Country B.

•                     You do not have any friends or established connections in Country B.

•                     You do not intend to develop any professional, social or sporting connections in Country B.

•                     You will remain employed by your Australian employer for the duration you are in Country B.

•                     You will return to Australia to work on-site for your Australian employer at least 4 times a year.

•                     You have a room available to you at all times in your parent 1's house in Australia.

•                     Upon completion of Person A's posting in Country B you will resume living in Australia full time.

Application to your circumstances for the income year ended 30 June 20XX

You have not been present in Australia for 183 days or more during the income year ended 30 June 20XX. Therefore, you are not a resident under this test for that income year.

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 and domicile tests of residency for the duration of the ruling period. In addition, for the years ended 30 June 20XX and 20XX, you will satisfy the 183-day test.

Therefore, you are a resident of Australia for income tax purposes for the duration of the ruling.