Edited version of private advice

Authorisation Number: 1052400469127

Date of advice: 30 May 2025

Ruling

Subject: Residency

Question 1

Are you a resident of Australia for taxation purposes in the relevant income years?

Answer 1

Yes.

This ruling applies for the following periods:

Year ended 30 June 20YY

Year ending 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts and circumstances

You were born in Country Z.

You moved to Country Y to complete your schooling.

Some of your family also moved to Country Y around this time.

You became a citizen of Country Y and remained settled there until you emigrated to Australia.

You moved to Australia with your spouse.

Your spouse is Australian.

You and your spouse were married in Australia a few years after you moved to Australia.

You were granted Australian permanent residency in the year after you were married.

You have children who were born in Australia. You subsequently had another child in Country Y.

Your application for Australian citizenship was approved and it was indicated to you that your citizenship ceremony would be a few months later, and you were aware of the usual requirement, and fully intended, to attend your citizenship ceremony in person.

You travelled to Country Y with your spouse and children, with the intent of visiting relatives and travelling.

You initially worked remotely, and then took long service leave from your Australian employer.

You were granted a visa which allowed you to travel outside Australia while you awaited your citizenship ceremony.

Your parent lived in Country Y, and you became aware of your parent's medical condition.

You were granted compassionate leave from your Australian employer, to allow you to remain in Country Y to care for and support your parent who was undergoing treatment.

You were given special dispensation to attend your citizenship ceremony online.

You became aware that your parent's condition may be terminal.

You made the decision at this time to remain in Country Y to continue to care for and support your parent.

It was always your intention to return to live in Australia although the exact timeframe for return was unknown given your parent's illness.

After several months of leave, your employment with your Australian employer was formally ceased.

While in Country Y caring for your parent, you resided with relatives.

After several months of travelling and living with relatives, you and your spouse and children moved into fully furnished short-term accommodation near your parent.

The lease on this accommodation was for a few months.

Due to the uncertainty with your parent's health, you continued to reside in this accommodation.

Eventually, you took up part time subcontract work in Country Y.

You entered a fixed term consulting contract with an Australian company.

This contract was subsequently extended to the current year.

This contract has required you to travel back to Australia on occasion and is facilitated by your former Australian employer, with whom you have maintained a strong relationship.

You and your family moved into new rental accommodation in Country Y.

You have furnished this property with second hand furniture and have kept personal items at a minimum as it is your intention to return to Australia at the earliest opportunity.

Your parent passed away.

Another family member also passed away in the same year.

You have remained in Country Y to attend to your parent's estate.

The following are the reasons why your stay has been longer than anticipated:

•                     your parent having a complex estate

•                     a slow and bureaucratic Country Y system, whereby probate cannot be applied for until tax matters are resolved

•                     the need to have Country Y contact details and be on a similar time zone so that Country Y organisations will deal with you to resolve aspects of your parent's estate

•                     you are the sole executor of the estate

•                     there are other beneficiaries of the estate, being your siblings.

You aim to apply for probate at the earliest opportunity.

After grant of probate, you will be able to effectively deal with the estate and you expect to return to Australia with your family before the end of the year.

Your children were not enrolled in school in Country Y given the unknown timeframe of their stay, and they have instead been home schooled.

You vacated the property you were renting in Australia and packed your belongings in storage, with the intention of renting or purchasing a property to reside in on your return.

The belongings included motor vehicles, bicycles, refrigerator, kitchenware, white goods, furniture, camping gear, clothing, and personal belongings.

You returned to Australia, where you repacked your belongings to ensure they remained in good order for your permanent return.

You have subsequently sold a motor vehicles due to it deteriorating in storage.

On the same return trip to Australia, you attended to work meetings to look for places to live and schools for your children.

You are a director and indirect shareholder of an Australian resident company. The business is modest in size and was disrupted by COVID-19 however it remains a going concern.

You hold an interest in a similar related business in Country Y. The business is modest in size and was disrupted by COVID-19. You are investigating winding this business up.

You and your spouse have Australian domiciled passive investments.

You do not hold such investments in Country Y.

You established an Australian self-managed superannuation fund (SMSF). The SMSF was established on the understanding that you would be returning to Australia soon to be able to effectively administer it.

You have continued to maintain Australian private health insurance for yourself and your family.

A number of spouse's family reside in Australia.

You have siblings living in Country Y.

You own a vehicle in Country Y.

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

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision

For tax purposes, whether you are a resident of Australia is defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).

The definition has four tests to determine your residency for income tax purposes. These tests are:

•                     the resides test

•                     the domicile tests

•                     the 183-day test, and

•                     the Commonwealth superannuation fund test. It is sufficient for you to be a resident under one of these tests to be a resident for tax purposes.

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

The resides test

The resides test is the primary test of tax residency for an individual. If you reside in Australia according to the ordinary meaning of the word resides, you are considered an Australian resident for tax purposes.

Some of the factors that can be used to determine whether you reside in Australia include:

•                     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. No single factor is decisive, and the weight given to each factor depends on your specific circumstances.

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 tests

Under the domicile test, if your domicile is in Australia, you are a resident of Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia.

Whether your domicile is Australia is determined by the Domicile Act 1982 and the common law rules on domicile. For example, you may have a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).

Whether your permanent place of abode is outside Australia is a question of fact to be determined in light of all the facts and circumstances of each case.

Key considerations in determining whether you have your permanent place of abode outside Australia are:

•                     whether you have abandoned, in a permanent way, living in Australia

•                     length of overseas stay

•                     nature of accommodation, and

•                     durability of association

The 183-day test

Under the 183-day test, if you are present in Australia for 183 days or more during the income year, you will be a resident, unless the Commissioner is satisfied that both:

•                     your usual place of abode is outside Australia, and

•                     you do not intend to take up residence in Australia.

The question of usual place of abode is a question of fact and generally means the abode customarily or commonly used by you when are physically in a country.

The Commonwealth 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 circumstances

We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that for the relevant period you are a resident of Australia as follows.

Considering your individual circumstances, we have concluded that you are a resident of Australia according to ordinary concepts.

It was your intention when you and your family left Australia a few years ago to return to Australia after visiting relatives and travelling for several months.

It is still your intention to return to Australia.

The reason for your extended stay in Country Y was due to family illness.

You have not abandoned your association with Australia.

You have maintained your continuity of association with Australia.

We also consider that your domicile is in Australia as you are a citizen of Australia and Australia is your domicile of choice.

The Commissioner is not satisfied that you have a permanent place of abode outside Australia.

We considered the following factors in forming our conclusion:

•                     you intend on returning to Australia

•                     your spouse is from Australia and has extended family in Australia

•                     you have your household and personal items in storage in Australia waiting for your return

•                     you were living in short term accommodation during your stay in Country Y

•                     your children were not enrolled in school in Country Y as you were uncertain as to a return date back to Australia.

You were not in Australia for more than 183 days since leaving Australia.

You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test.

You are a resident of Australia for taxation purposes for the relevant income years.