Private ruling: Residency
Date of advice: 4 July 2023
Published: 28 August 2023
Date scheme commenced: X July 20XX

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: No. This private ruling applies for the following periods: Income year ending 30 June 20XX Income year ending 30 June 20XX

Relevant facts and circumstances: You have accepted an offer of employment in a foreign country. You intend to move to the foreign country in October 20XX on an employment visa. The visa has a duration of X years, but there is no cap on the number of times it can be extended. You will be employed on a permanent full-time contract in the foreign country. Your spouse will be a dependent on your visa and will move to the foreign country with you. The intention is for your spouse to obtain employment there. You and your spouse intend to rent an apartment in the foreign country. You may live in famished accommodation arranged by your employer for a short period at the beginning of the move while you find long-term accommodation. You and your spouse own a house in Australia which you intend to rent out and will not be available for your use. You intend to maintain your mortgage, and some other accounts. You intend to shut your other bank accounts in Australia. You will not have any other financial or employment ties with Australia and no assets or possessions in Australia such as motor vehicles. You do not intend to return to Australia within the period of the visa and your intention with regard to returning at the expiration of the visa's duration remains uncertain and dependent on future work opportunities. You and your spouse will be subject the foreign country's revenue collection and will pay tax on your income from our employment in the foreign country as well as receive health insurance coverage under your contract of employment. You and your spouse will not maintain any health insurance in Australia.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1)

Reasons for decision: Summary: You will cease to be a resident of Australia for taxation purposes from the date of your departure from Australia, | Detailed Reasoning - Detailed reasoning: 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 test • 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 . | Detailed Reasoning - 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. | Detailed Reasoning - The domicile test: 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 definitely abandoned, in a permanent way, living in Australia • length of overseas stay • nature of accommodation, and • durability of association | Detailed Reasoning - 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. | Detailed Reasoning - 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. | Detailed Reasoning - 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 period from the date of your departure in October 20XX to 30 June 20XX, you will not be a resident of Australia as follows. Taking into account your individual circumstances, we have concluded that you will not be a resident of Australia according to ordinary concepts. We also consider that your domicile is in Australia and the Commissioner is satisfied that your permanent place of abode will be outside Australia. We considered the following factors in forming our conclusion: • You and your spouse intend to move to the foreign country for at least X years but possibly longer • You will be employed on a permanent full-time contract in the foreign country • You and your spouse intend to rent an apartment in the foreign country • You and your spouse own a house in Australia which you intend to rent out and will not be available for your use. You will not be in Australia for 183 days or more during the 20XX and 20XX income years. You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test.