Private ruling: Residency for tax purposes
Date of advice: 15 January 2021
Published: March 2021
Ruling period: Year ended 30 June 2020
Date scheme commenced: 1 July 2019

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

Relevant facts and circumstances: You were born in Country X and are a citizen of Country X and Australia. You relocated to Australia with your family many years ago. You lived in Australia until early 20XX when you relocated to Country X. You ceased to be a tax resident of Australia and became a resident of Country X from that time. You consider your domicile to still be in Australia. You are single and do not have any children. You have parents and a sibling who live in Australia. You sold your former main residence in Australia approximately five years ago. You own two properties in Australia which are let out to friends. You are a co-director and sole shareholder of an Australian private company. The company acts as trustee of a trust and does not carry on any business or investment activities in its own right. You are a beneficiary of the trust. The trust owns a property in Australia at which you stayed from time to time in the relevant income year. When you left Australia in 20XX, your SMSF was shut down and the assets were transferred to an APRA regulated fund. You have an Australian bank account and you are noted as a non-resident. You have an Australian credit card. You still have an Australian share trading account which was used to facilitate share investments prior to your departure in 20XX. You have only purchased shares once since leaving Australia. You are not eligible to contribute to the Public Service Superannuation Scheme or the Commonwealth Superannuation Scheme. You own an apartment in Country X. You maintain two bank accounts and two credit cards in Country X. You are registered as a voter in Country X. You have national insurance and health numbers in Country X. Since early 20XX, you have lived primarily in Country X, although you have split your time between Country X and travelling periodically aboard a cruise ship on which you maintain a berth. You visited Australia on several occasions during the relevant income year and you spent more than 183 days here, primarily because of COVID-19. You stayed at various places in four different states during the year. You did not move any furniture, clothing or other chattels to Australia during this period. You were on board the cruise ship moored at a port in Australia when a decision was made that required all passengers to either disembark or refrain from embarking when the vessel was due to leave Australian waters. From that time until your departure around four months later, you took the following steps: • you booked a fight to Country Y: however, the flight was cancelled as the government of Country Y closed its borders to non-citizens • you then booked and paid for a flight to Country X; however, this flight was cancelled • you applied for an exemption to fly to Country Y: however, your request was denied • you were subsequently granted an exemption to leave Australia for Country X

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

Reasons for decision: Summary: The terms 'resident' and 'resident of Australia' 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. The tests are: • the resides test, • the domicile test, • the 183 day test, and • the superannuation test. | 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. However, where an individual does not reside in Australia according to ordinary concepts, they may still be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests. In your case, your behaviour while in Australia was consistent with that of a visitor and not that of a resident. Therefore, you did not reside in Australia during the 2020 income year and were not 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. In your case, although your domicile is still in Australia, the Commissioner is satisfied that you had a permanent place of abode outside of Australia during the 2020 income year. Therefore, you were not a resident of Australia under this test. | Detailed Reasoning - The 183 day 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. Although you were present in Australia for more than 183 days in the 2020 income year, you were not a resident under this test as the Commissioner is satisfied that your usual place of abode was outside of Australia and you had no intention of taking up residence here. | 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 or the Commonwealth Superannuation Scheme, or that person is the spouse or child under 16 of such a person. You were not a resident under this test. | Detailed Reasoning - Conclusion: You do not meet any of the tests. Therefore, you are not a resident of Australia for taxation purposes.