Private ruling: Residency for taxation purposes
Date of advice: 25 March 2021
Published: June 2021
Ruling period: Year ended 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022 | Year ending 30 June 2023
Date scheme commenced: 1 July 2019

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

Relevant facts and circumstances: You are a citizen of Australia. You relocated to Country Z. You intend to live and work in Country Z on a permanent basis. You have continued to work for the same employer and will carry out your duties for your employer exclusively in Country Z. Since relocating to Country Z, you have not returned to Australia. Your spouse owns a house in Country Z where you reside together. You are in Country Z on a Visa and have applied for Permanent Residency. You have adult children living in Australia. You have the following assets in Australia: • an Australia bank account • Australian superannuation • an amount of shares You have advised the bank that you live in Country Z. You do not own property in Australia. You intend to visit Australia a couple of times a year. In the years prior to moving to Country Z, you resided overseas and entered Australia several times. You are not registered with Medicare. You do not have health insurance in Australia. You are not registered on the Australian Electoral Roll. You have not been a member of the Commonwealth Superannuation Scheme (CSS) or the Public Superannuation Scheme (PSS).

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

Reasons for decision: Summary: The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: • the resides test, • the domicile test, • the 183 days test, and • the superannuation test. Only one of the tests needs to be met for an individual to be a resident of Australia for tax purposes. | Detailed Reasoning - The resides test: The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 5 th edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; have one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. In your case, you: • intend to live and work in Country Z on a permanent basis, • were living and working in another foreign country for over five years prior to relocating to Country Z, • currently live in accommodation owned by your spouse in Country Z, • do not have a place to live in Australia, and • have not returned to Australia since late 20YX. Therefore, you will not be taken to be residing in Australia during the 20XX to 20XY income years and will not be a resident of Australia under this test. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia. | Detailed Reasoning - Domicile: A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. A person may acquire a domicile of choice in another country if they have the intention of making their home indefinitely in that country (section 10 of the Domicile Act 1982 ). The intention needs to be demonstrated in a legal sense, for example, by way of becoming a permanent resident or a citizen of the other country. In your case, you are a citizen of Australia and it is considered that your domicile is in Australia. | Detailed Reasoning - Permanent place of abode: A person's 'permanent place of abode' is a question of fact to be determined in the light of all the circumstances of each case. 'Permanent' does not mean everlasting or forever but it is to be distinguished from temporary or transitory. In FC of T v Applegate (79 ATC 4307; (1979) 9 ATR 899), Fisher J described 'permanent place of abode' as being: .....the taxpayer's fixed and habitual place of abode. It is his home, but not his permanent home. It connotes a more enduring relationship with the particular place of abode than that of a person who is ordinarily resident there or who has there his usual place of abode. Material factors for consideration will be the continuity or otherwise of the taxpayer's presence, the duration of his presence and the durability of his association with the particular place. In your case, as mentioned above, you: • intend to live and work in Country Z on a permanent basis, • live in accommodation owned by your spouse, • do not have a place to live in Australia, and • have not returned to Australia since late 20YX. Consequently, the Commissioner is satisfied that you will have a permanent place of abode outside of Australia during the 20XX to 20XY income years and therefore, you will not be a resident of Australia under this test. | Detailed Reasoning - The 183 days test: Under the 183 day test, a person is a resident of Australia if they are actually physically present in Australia for 183 days or more in an income year unless the Commissioner is satisfied that their usual place of abode is outside of Australia and they have no intention of taking up residence here. You will not be a resident under this test for the 20XX to 20YX income years as you will not be present in Australia for more than 183 days during any of those years. | Detailed Reasoning - The superannuation test: An individual is still considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. You are not a resident under this test. | Detailed Reasoning - Conclusion: As you do not meet any of the residency tests, you are not a resident of Australia for taxation purposes.