Private ruling: Residency
Date of advice: 7 July 2025
Published: 1 September 2025
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Were you a resident of Australia for tax purposes as defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for the period of DD MM YYYY up until DD MM YYYY? | A1: Yes. You are considered an Australian resident for tax purposes in an income year if you are physically present in Australia for 183 days, unless your usual place of abode is outside Australia. You were in Australia until DD MM YYYY, so your presence exceeded 183 days for the year ending 30 June 20XX. However, since you and your family left Australia indefinitely and established a home in Country B, your usual place of abode remained in Australia until departure. Under the 183-day test, you were a part-year resident, and your Australian residency ceased from the date you moved to Country B. | Q2: Are you a resident of Australia for tax purposes as defined by subsection 6(1) ITAA 1936 from DD MM YYYY up until and including the 20YY and 20YY income years? | A2: No.

Relevant facts and circumstances: This ruling applies to Person A and Person B (jointly referred to as you). On DD MM YYYY, Person A was born in Country B. On DD MM YYYY, Person B was born in Country B. You are citizens of Country B. On DD MM YYYY, you immigrated to Australia. On DD MM YYYY, you became Australian citizens. You hold dual citizenship of both Australia and Country B. You are married. You have a child. You hold passports with Country B. Your child holds a passport with Country B. You maintained a permanent home in Australia until you departed for Country B. Relocation to Country B On DD MM YYYY, your child departed Australia to take up employment in Country B. On DD MM YYYY, you departed Australia for Country B without a return airline ticket back to Australia. Your intention to relocate to Country B was primarily to support your child by joining them during their time abroad, with plans to return to Australia permanently in approximately three years, aligned with the expected conclusion of their employment contract. However, since your child has now commenced a new role with a different employer in Country B, the terms and duration of their current engagement remains uncertain. From DD MM YYYY to DD MM YYYY, you travelled and spent time in Country C. On DD MM YYYY, you arrived in Country B. Australian Assets You hold several bank accounts. You have significant cash investments in Australian banks. You informed your investment provider of your status as a foreign resident to ensure non-resident withholding tax could be applied. You receive dividends from a private company. On DD MM YYYY, you sold your house. You wound up your business. You donated and sold your household effects. Country B Assets On DD MM YYYY, you jointly purchased a unit in Country B. You own a car. You own basic household furniture. You hold a bank account. Associations with Australia You are members of an RSL. You have not removed your name from the Australian Electoral office electoral roll. You have not removed your name from Medicare. You do not hold any private health insurance in Australia. You have family members in Australia. Associations with Country B From DD MM YYYY to DD MM YYYY, you stayed with relatives upon your arrival in Country B. From DD MM YYYY to DD MM YYYY, you leased a property in Country B. You have no social and sporting connections in Country B. You have advised your financial institution with whom you have investments with that you are a foreign resident so that non-resident withholding tax can be deducted. You have not lodged any tax returns with Country B. You do not hold private health insurance in Country B. You have extended family members in Country B. Income You hold no employment in Australia. You hold no employment in Country B. Person A has chosen to take a break from work and will resume employment when they return to Australia. Person B has retired. You earned interest income from the proceeds of your Australian property sale. You receive dividend income from a privately held company. You are not members of a superannuation scheme established by deed under the Superannuation Act 1990 (the Public Sector Superannuation Scheme). You are not eligible employees for the purposes of the Superannuation Act 1976 (the Commonwealth Superannuation Scheme). Dependents You have no dependents. Return to Australia You have not made any returns back to Australia since departing. You plan to return to Australia once your child decides to. However, the timing of their decision is currently uncertain.

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

Reasons for decision: Detailed Reasoning - Overview of the law: 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 observations contained in the case of Hafza v Director-General of Social Security (1985) 6 FCR 444 are also important: Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248; and Keil v Keil [1947] VLR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 235... here the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained. 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 30 June 20YYbased on the following: • Physical presence ° from DD MM YYYY, you moved to Country B ° from DD MM YYYY, you will not reside in Australia for 183 days or more in an income year ° from DD MM YYYY, you have not made any returns back to Australia since departing ° you intend to return to Australia once your child decides to • Intention or purpose ° Your intention was to relocate to Country B primarily to support your child during their time abroad, with plans to return to Australia permanently in approximately three years, aligned with the anticipated end of the employment contract. However, since your child has now started a new role with a different employer in Country B, the terms and duration of their current position remain uncertain • Behaviour ° since DD MM YYYY, you have resided in the Country B • Family or employment ties ° you have extended family both in the Australia and Country B ° Person A has chosen to take a break from work and will resume employment when they return to Australia. ° Person B has retired. • Maintenance and location of assets ° you retained your Australian bank accounts ° you have significant cash investments in Australian banks ° you receive dividends from an Australian private company ° you wound up your Australian business ° you sold your Australian house ° you sold and donated your Australian household effects ° you purchased a property in Country B ° you purchased a car in Country B ° you own household furniture in Country B ° you hold a bank account in Country B • Social connections ° you are members of a local RSL in Australia ° you relocated to Country B to support your child's employment, establishing a social connection through shared residence and family ties 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. | Detailed Reasoning - 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: In your case, you were born in XX and your domicile of origin is XX. You immigrated to Australia on DD MM 20YY and became an Australian citizen on DD MM 20YY. It is considered that you abandoned your domicile of origin in 20YY and acquired a domicile of choice in Australia. You are entitled to reside in Australia indefinitely and while living in Australia, you obtained permanent residency/citizenship. Therefore, your domicile is Australia. | Detailed Reasoning - 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 Australia because: • You sold your Australian residence and household items • You wound up your Australian business • You informed your Australian investment provider of your status as a foreign resident to ensure non-resident withholding tax could be applied. • You rented a property in Country B for a period following your arrival • You purchased property in Country B • You intend to remain in Country B to support your child and will return to Australia once their employment concludes • Your extended family reside in Country B • You are dual citizens of Australia and Country B • You hold passports for Country B Therefore, you are not a resident 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 the 20YY and the 20YY income years: You will not be present in Australia for 183 days or more during the 20YY, and the 20YY income years. Therefore, you are not a resident under this test. | 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. | Detailed Reasoning - Application to your situation: You are not 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 a resident under this test. | Detailed Reasoning - Conclusion: As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes since departing Australia on the DD MM 20YY, and for the 20YY and the 20YY income years. | Detailed Reasoning - Additional Information: Changing from resident to non-resident during an income year If your status changes from resident to non-resident before the end of an income year you should answer 'yes' to the question 'Are you an Australian resident?' on your tax return for that year. This ensures you are taxed at resident rates for that part of the tax year you were resident in Australia. Your non-residency for part of the year will be taken into account by a reduction in your tax-free threshold for that year. You will be entitled to a pro-rata tax-free threshold for the number of months you were an Australian resident during the income year. Non-residents of Australia do not have to pay the Medicare levy, so you can also claim the number of days that you were not an Australian resident during a tax year in your return as exempt days.