Private ruling: Residency
Date of advice: 8 December 2022
Published: 6 February 2023
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: No.

Relevant facts and circumstances: You were born in Australia. You are a citizen of both Australia and Country Z. You left Australia several years ago with your spouse to live in Country Z. You and your spouse resigned from your employment in Australia. You sold your home in Australia. You have no intention of moving back to Australia to reside permanently. You are a resident of Country Z for taxation purposes. You and your spouse have a business in Country Z. You and your spouse own a home in Country Z and are in the process of building another property in Country Z. Since leaving for Country Z you have returned to Australia for short visits and these visits have not exceeded 30 days. You intend on returning to Australia for several months each year to spend time with your family. You do not intend on being in Australia for more than 183 days in any financial year. You will rent a property when you are in Australia. Your spouse is immune compromised, and this is the safest option for cleanliness and safety. You own the following assets in Country Z: • Property • Bank accounts • A number of vehicles • mobile phone • share investments and retirement accounts • furnishings You own the following assets in Australia: • Motor vehicle which was gifted to your child • Bank account You receive no income in Australia from real property. You receive interest and dividends from an Australian trading account you purchased when a non-resident of Australia. The majority of your children live in Country Z. The minority of your children lives in Australia. You have been removed from the Australian electoral roll. You do not have private health insurance in Australia. You and your spouse are not eligible to contribute to the PSS or the CSS Commonwealth super funds.

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

Reasons for decision: Summary: 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 2022/D2 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 relevant income year you are not a resident of Australia as follows. Taking into account your individual circumstances, we have concluded that you are not 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 is outside Australia. We considered the following factors in forming our conclusion: • you and your spouse have been living in Country Z for several years • You do not intend on returning to Australia on a permanent basis • You have a home in Country Z • You have a business in Country Z • You intend on coming to Australia for a few months each year to visit family You do not intend on being in Australia for more than 183 days in any financial year. You do not intend on taking up residency in Australia and your usual place of abode is in Country Z. You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test. You are not a resident of Australia for taxation purposes for the relevant income years.