Private ruling: Residency for tax purposes
Date of advice: 9 October 2025
Published: 24 November 2025
Ruling period: Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you residents of Australia for tax purposes from 1 July 20XX to 30 June 20XX? | A1: No.

Relevant facts and circumstances: You were born in XXX and are a citizen of XXX. Your parents are Australian citizens and were working in XXX at the time of your birth and moved back to Australia when you were a child. Your spouse was born in Australia and is a citizen of Australia. You both travelled to XXX in MM 20YY. Your spouse is employed in XXX under 12 monthly contracts. You resigned your Australian employment in MM 20YY and are not employed. You both first entered XXX on a one year visa, which were then renewed for another 12 months. On DD MM 202YY your spouse was granted a three year working visa and you were granted a dependent visa that permits work up to 28 hours per week. You will renew your visas until you are eligible to apply for permanent residency in XXX. You lease an apartment in XXX. You signed a lease in MM 20YY that was initially for two years and has now converted to a rolling lease. You have purchased household goods and furniture in XXX You each hold bank accounts in XXX. You have both lodged tax returns in XXX since 20YY. You list yourselves as residents for tax purposes in this country. You do not own any property in Australia. Prior to travelling you rented a property in Australia. You have stored some of your personal and household items at your parent's home in Australia. You have disposed of some larger household items in Australia. You do not have any dependents. You each own shares in listed Australian companies. You each have Australian bank accounts. You receive dividend income from your Australian investments and interest from your Australian bank accounts. You have advised the Australian Electoral Commission you are overseas electors. You did not advise Medicare of your departure. You have not advised any Australian financial institutions that you are non-residents. You lodge income tax returns in Australia as residents. You have cancelled your Australian private health cover. Your spouse has suspended their Australian private health cover. You have extended family in Australia. You both travelled to Australia to visit family for a period of XX days from DD MM 20YY to DD MM 20YY. You are not eligible members of a Commonwealth superannuation scheme.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1) | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: 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: | Detailed Reasoning - 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 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. | Detailed Reasoning - Application to your situation: You are not a resident of Australia under the resides test for the period DD MM 20YY to DD MM 20YY based on the following: • You departed in Australia in MM 20YY and remain in XXX. • You have long term accommodation in XXX. • Your spouse has employment in XXX, and you will seek employment once your language skills have improved. • You have advised that, once eligible, you will apply for permanent residency in XXX. • You will stay with family when you visit Australia and will not establish your own accommodation. 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). | Detailed Reasoning - 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. | Detailed Reasoning - Application to your situation: It is considered that you have not abandoned your Australian domicile and acquired a domicile of choice in XXX. You are not entitled to reside in XXX indefinitely and while living in XXX, you only hold a visa which is valid until DD MM 20YY. Therefore, you both still have an Australian domicile. 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. | Detailed Reasoning - Application to your situation: The Commissioner is satisfied that your permanent place of abode is outside of Australia because: • you both have been outside of Australia from MM 20YY • you both have been physically present in XXX from MM 20YY • your purpose is to live and work in XXX for an indefinite period • you have opened bank accounts in XXX • you have employment in XXX • you have rental accommodation in XXX and no permanent residence in Australia • you do not maintain any professional or social memberships or associations in Australia Therefore, you are not residents of Australia under the domicile test. | Detailed Reasoning - 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. | Detailed Reasoning - Application to your situation: You will not be present in Australia for 183 days or more in the period of review. Therefore, you will not be residents under this test for these income years. | Detailed Reasoning - 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. Neither of you are 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 residents under this test. | Detailed Reasoning - Conclusion: As you do not satisfy any of the four tests of residency, you will not be residents of Australia for income tax purposes for the 20YY to 20YY income years.