Private ruling: Residency
Date of advice: 29 July 2022
Published: November 2022
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Did you remain an Australian resident for taxation purposes after your departure in 20XX? | A1: Yes.

Relevant facts and circumstances: You (Person A and Person B) are dual citizens of Australia and Country B. You were born In Country B and you were granted Australian citizenship. You have resided in Australia for approximately XX years. You and your dependent children left Australia for Country A for a planned six-month trip overseas for a holiday. Your plan was to travel to Country A for approximately a month. After, you planned to travel to Country B for three months before returning to Australia via other countries. Person A had arranged a six-month sabbatical with their employer. Person B ceased their Australian employment with a verbal agreement they would be able to recommence their employment if they wished to upon their return to Australia. Due to the rising risks associated with the COVID-19 pandemic, you only stayed in Country B for 2 weeks. You re-evaluated your travel plans and decide to visit family in Country B. The initial timeframe you expected to return was approximately 9 month after you departed Australia, when Person A's temporary contract with their employer in Country B ceased. You have remained in Country B to date because of travel restrictions imposed due to the COVID-19 pandemic, financial difficulties and to care for multiple family members who have developed medical conditions. You had been actively checking flight availability on a daily basis and joined online forums for Australians looking to return Australia before travel restrictions eased. The border restrictions between Country B and Australia eased. Person A's parent informed you of their medical diagnosis shortly after travel restrictions eased and had multiple surgeries. Other family members also became seriously ill and you became the primary caregivers for your respective family members. Although you were still actively looking for flights to return to Australia after travel restrictions eased, your focus changed to looking after your family members. Initially, you resided with Person A's parents in Country B. You then rented a property on Airbnb in Country B. With tight travel restrictions imposed in the Country B during the lockdowns, the landlord of that property agreed to remove the property from Airbnb and allow you to rent the Airbnb on a month-to-month basis. Approximately a year later, your landlord decided to place the property back on AirBnB. You were forced to leave the property and are living with Person A's parents again, where you intend to reside until returning to Australia. Your children were still enrolled at school in Australia and were doing online learning until online learning ended. The children were enrolled in school in the Country B approximately 5 months after you departed Australia. The current term has now ended and the eldest child has now finished primary school. Person A has remained on sabbatical with their Australian employer since departure. To finance your stay in Country B, you have both gained employment. Person B is currently employed on a contract basis in Country B. Person A was employed in Country B initially on a temporary contract. Person A is now employed on an ongoing basis. Your employers in Country B are of the understanding that you may leave at any given time. Person A's employment offer was discussed and approved with blessings from his Australian employer. You jointly own your Australian main residence (the property). You intended to rent out your property on a short term basis. However, with the travel restrictions that were introduced following the pandemic, you allowed a friend to reside at the property shortly after your departure for approximately a year. The property has been left vacant since your friend vacated the property. Your social connections in Australia include: • Person A maintaining an active management role in a sporting club, providing treasury and bookkeeping assistance, as well as guidance as the former president and treasurer. • Person A keeping in regular contact with their employer, colleagues and friends in Australia. • Person B keeping in regular contact with their friends in Australia, including her mum's group friends. • Your eldest child continues to be part of a sporting club in Australia, where Person A also volunteers. Your social connections in the Country B include: • Person A volunteering at a sporting club that your eldest child is a member of. • Person B attending a gym several times a week in Country B to maintain fitness. • Person B occasionally volunteering at the sporting club that your eldest child is a member of. • Your eldest child joining a local sorting club. Person A returned to Australia on one occasion for 8 days. The purpose of Person A's visit to was to visit family home, collect belongings, meet with friends, meet with club he was club president of, and meeting your child's sailing club to maintain family connection. You do not intend to reside in Country B permanently. You anticipate returning to Australia on a permanent basis by Christmas in late 20XX, provided your family members' have recovered from their health conditions. You intend to return to Australia for Christmas in late 20XX for the family to visit friends, meet with Person A's employer and the clubs you are involved in if you cannot return to Australia permanently at that time. Your assets in Australian include: • personal effects, including all of your sentimental items. • furniture/white goods which remains in your Australian property. • superannuation in Australia, which you intend to keep in Australia and to be continued contributing towards when you return. • approximately seven Australian bank accounts. Your assets in Country B include: • one motor vehicle • some personal effects • superannuation accounts, which you intend to transfer the balance when to your Australian superannuation accounts upon return to Australia. • bank accounts solely to deposit salary and daily expenses. You have never lodged nor required to lodge an income tax return in Country B. You are not contributing members of the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS).

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

Reasons for decision: Detailed Reasoning - Overview of the law: 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 IT 2650 Income tax: residency - permanent place of abode • Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia . | 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 ruling period you are a resident of Australia as follows. Taking into account your individual circumstances, we have concluded that you are a resident of Australia according to ordinary concepts. We also consider that your domicile is in Australia and the Commissioner is not satisfied that your permanent place of abode is outside Australia. We considered the following factors in forming our conclusion: • You have been physically present in Country B for more than two years. • You intended to stay in Country B on a temporary basis initially to visit family and now intend to stay in Country B be primary caregivers to your family members' who have developed medical conditions. • You intend to return to Australia permanently once your family members' health conditions improve. • You still maintain your main residence which is available for you to use when you return to Australia. • You have only stayed in temporary AirBnB accommodation and your parent's house while in Country B. • You still have a strong continuity of association with Australia. You have maintained social ties, employment ties and the majority of your assets in Australia. You were in Australia for 183 days or more during the 20XX income year, and the Commissioner is not satisfied that both: • your usual place of abode is outside Australia, and • you do not intend to take up residence in Australia. We considered the following factors in forming our conclusion: • You were residing in Australia prior to your departure. • You have more significant assets and social ties in Australia compared to Country B. • In Country B, you only resided in temporary AirBnb accommodation and Person A's parents' house. You still maintain a main residence in Australia that is readily available when you return. • You only intended to stay in Country B initially for three months for a holiday and to visit family. • COVID-19 related travel restrictions prevented you from returning to Australia for a period of time. You have made an effort to return to Australia during this time. Since restrictions have eased you have chosen to remain in the Country B temporarily to look after your family members with medical conditions. • You anticipate returning to Australia to reside permanently once your family members' health conditions improve. You do not intend to live in the Country B permanently. You were not 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.