Private ruling: Residency
Date of advice: 22 January 2026
Published: 16 March 2026
Ruling period: 1 July XXXX to 30 June XXXX
Date scheme commenced: XXXX

Ruling: Q1: Did you cease to be residents of Australia for the purposes of subsection 6 of the Income Tax Assessment Act 1936 (ITAA 1936), on XXXX? | A1: Yes.

Relevant facts and circumstances: Circumstances in Australia Person A (A) and Person B (B) were married in XXXX, and have a child together, who was born in Australia in XXXX. A and B were born in Australia and are Australian citizens. A lived in the Country X as a child with their family from approximately XXXX to XXXX. A holds a XXXX passport. B holds a XXXX passport. On XXXX, A, B and their child left Australia to relocate overseas to Country A. A and B previously held separate Australian mobile phone numbers. A's Australian mobile number was held by Company A and they forfeited the number when their role at the Company A ceased. B still retains their Australian phone number. This number is only kept for emergencies and otherwise remains unused. A and B cancelled their respective Australian based credit cards with their Australian bank on XXXX. A and B retain a bank account with an Australian bank to receive rental income and cover property-related outgoings in connection with the long-term lease of their rental property (Property C) in XXXX. They have advised their Australian bank of their relocation overseas and have advised they are non-residents so that non-resident withholding tax can be withheld. They do not have any other bank accounts in Australia. A and B have advised Medicare of their overseas relocation. A and B cancelled their private health insurance in Australia. A and B have notified the Australian Electoral Commission (AEC) of their relocation overseas and intention to not return from overseas. They have been removed from the electoral roll. A and B are not eligible to contribute to the Public Sector Superannuation Scheme (PSS) or Commonwealth Superannuation Scheme (CSS) superannuation funds. Company A business A is the co-founder of the Company A. Following the sale of the Company business in XXXX, A and B began planning, in late XXXX, to relocate overseas permanently. After the sale of the Company A, A stepped down as a director and was engaged by the company as a consultant for a limited time. A ended their consultant work for Company A in XXXX. After travelling around assess various locations to relocate to, A and B identified XXX as an ideal destination, which they saw as ideal to raise their family. Australian assets A and B owned a property located at XXXX, which was sold on XXXX (Property A). On XXXX, in anticipation of their move to XXXX, A and B appointed an agent to sell their property located at XXXX (Property B). The property was sold on XXXX. A and B hold a property for investment purposes located at XXXX (Property C). Property C was rented out for the entire financial year ended XXXX to an unrelated third party. Property C was also rented out to an unrelated third party for the XXXX financial year. Business interests in Australia A and B have ceased all Australian employment. A remains a director of start-up Company B and Company C in Australia, of which they are an investor. A is not involved in the day-to-day activities of Company B or Company C. Thier involvement is largely limited to support on strategic decisions for the direction of the business and attendance at board meetings when required (generally on a quarterly basis). A spends a few of hours per month supporting these two businesses, with the remainder of their time is spent on their business focus and investments in XXXX. A is also a director of Company D, a former entity in the Company A group which is in the process of being deregistered. Circumstances in Country A In XXXX, A and B entered into a lease for an apartment in XXXX (Apartment B). A utilised the Apartment B a central base in the XXXX to use as accommodation during business trips and to conduct business within the XXXX and XXXX. On XXXX, A and B entered into a long-term residential tenancy agreement to lease an apartment in XXXX (Apartment A). The lease for the Apartment A commenced on XXXX and is for an initial 24-month term, with an option for renewal for a further term via mutual agreement. Some of the utilities servicing Apartment A are included under the terms of the lease agreement. Prior to relocating to Country A in XXXX, A and B stayed at Apartment B on occasion. They also stored all newly acquired furniture and other personal effects that were intended for their residence in Country A at the Apartment B. These items were subsequently transferred from the Apartment B to the Apartment A. A and B received long-stay visas which were valid for XXXX days and expired on XXXX. As B holds an XXXX passport, they did not require a visa upon their arrival in XXXX. Subsequently, A and B obtained a resident permit which expire on XXXX. Upon the expiry of these permits, A, B intend to extend them. After arriving in Country A, A entered into a 24-month phone plan with XXXX in Country A. A and B opened an everyday local bank account in Country A through XXXX. This account is used to pay for ongoing everyday expenses, such as utilities, motor vehicle expenses and other daily shopping needs. On XXXX, A and B hired a full-time nanny and housekeeper for their child. From XXXX, A and B hired a full-time private chef in Country A. B has joined memberships in Country A. A and B have redirected all their mail to the Apartment A. Business interests in Country A Following the sale of Company A, in XXXX, A engaged an investment advisor based in XXXX and set up a substantial investment portfolio with XXXX. This was undertaken to assist with managing their wealth and explore future business activities. On XXXX, A purchased a substantial block of land XXXX with the intention to develop the land for commercial purposes. On XXXX, A engaged a Country A-based professional service provider to assist in their family's residence application. A has invested in a new overseas company (Company E). A was appointed to the board of Company E and will be managing its growth from Country A. A no longer has any investment advisors based in Australia. Their investment advisors and banking are now all located outside of Australia. A is looking for a long-term lease for office space in Country A. They are utilising the business centre located at the Apartment A complex in the meantime. Residence and transport in Country A A makes the rent payments for the Apartment A from thier Country A account. A and B engaged XXXX to provide internet access to the Apartment A. A and B took out a home insurance policy for the Apartment A. A and B purchased homewares and furniture in Country A and XXXX to furnish the Apartment A. Furthermore, A and B had their household and personal effects shipped to the Apartment A. In XXXX, A and B purchased a new motor vehicle in Country A and took out an insurance policy for the vehicle with the registered address being at Apartment A. A and B relinquished their Australian driver's licences in XXXX. In XXXX, A and B have obtained Country A driver's licences.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1) | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: Section 995-1 defines an Australian resident for tax purposes as a person who is a resident of Australia for the purpose of the ITAA 1936. The term 'resident' and 'resident of Australia', as applied to an individual are defined in subsection 6(1) of the ITAA 1936. Subsection 6(1) of the ITAA 1936 defines a 'resident' or 'resident of Australia' as: (a) person, other than a company, who resides in Australia resides test and includes a person: (i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia; domicile test (ii) who has actually been in Australia, continuously or intermittently, during more than one-half of the year of income, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia, and that the person does not intend to take up residency in Australia; 183-day test or (iii) who is: (A) a member of the superannuation scheme established by deed under the Superannuation Act 1990 ; or (B) an eligible employee for the purposes of the Superannuation Act 1976 ; or (C) the spouse, or a child under 16, of a person covered by sub-subparagraph (A) or (B)... Commonwealth superannuation fund test Taxation Ruling TR 2023/1 Income tax: residency tests for individuals (TR 2023/1) outlines the Commissioner's interpretation of the law in respect of the residency tests. Paragraph 11 of TR 2023/1 explains that the definition of 'resident of Australia' has 4 alternative tests for residency of individuals to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are: • the resides test • the domicile test • the 183-day test; and • the Commonwealth superannuation fund test. | Detailed Reasoning - The Resides test: The Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'. Furthermore, 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. Physical presence and intention will coincide for most of the time. Once a person has established a home in particular place, a person does not necessarily cease to be resident there because he or she is physically absent. The question is whether they have maintained a 'continuity of association' with Australia which is in turn established by considering their other connections to Australia. As indicated in paragraph 20 of TR 2023/1, 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, and • social and living arrangements. The Commissioner notes that no one single factor is decisive, and the weight given to each factor depends on each individual circumstances. As 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 | Detailed Reasoning - Application to your circumstances: A and B (both referred to as 'you' as relevant) are not a resident of Australia under the resides test from XXXX based on the following: • You and their child departed Australia on XXXX and have permanently resided in Country A since. • You sold Property A on XXXX and Property B on XXXX. • The Property C is held for investment purposes only and is leased long-term by unrelated third parties. Therefore, it is not available to you. • Company A was sold in XXXX. A stepped down as a director but was engaged by the new owners of Company A as a consultant until XXXX. • You have ceased all Australian employment. • Your household and personal effects were shipped to Country A. You also purchased other homewares and furniture in Country A for Apartment A. • You have remained in Country A, other than short trips for either business or holiday purposes. • Your resident permits allow you to reside in Country A until XXXX. You intend to apply to extend your permits for the current maximum allowable length of time. • You entered into a long-term residential lease for an apartment in Country A which commenced on XXXX. • You cancelled your respective Australian credit cards prior to leaving Australia. • Your only Australian bank account is used solely for the purposes of the investment property. • You have informed the bank of your relocation overseas. • You have advised Medicare of your overseas relocation. • You cancelled your Australian private health insurance on XXXX. • You notified the AEC of your relocation and intention to not return from overseas. As such, you have been removed from the electoral roll. • You purchased a motor vehicle in Country A in XXXX. • Your Australian driver's licences have been allowed to expire and you have obtained your Country A driver's licences. • B has joined memberships in Country A. Your lack of physical presence in Australia, intention, and behaviour during the period from XXXX are consistent with your intention to live in Country A. The fact that you moved your family and your personal and household effects to Country A, sold your Australian assets including your business and the property you resided at, purchased and leased assets in Country A, and set up local memberships in Country A is consistent with behaviour that indicates an intention and purpose to resides outside of Australia from XXXX. Your intention to remain in Country A for the foreseeable future is evident in your behaviour of setting up your residence, while also creating social, family and employment ties in Country A. This intention and behaviour combined with your limited physical presence in Australia and your limited family, social and business/employment ties since your relocation indicate you had shifted your life to Country A from XXXX. You were residents of Australia until XXXX based on the following: • You owned properties in Australia and lived in them until XXXX. • You and your family resided in Australia until XXXX. • A owned and was closely involved in a business in Australia until it was sold in XXXX. A then had employment in Australia until XXXX. • You had Australian private health insurance. • You had Australian credit cards until XXXX. Until your relocation on XXXX, you were residents under the resides test due to your physical presence, behaviour, intention, family ties and social and living arrangement being consistent with someone who is a resident. | 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. Your domicile it is governed by common law as modified by the Domicile Act 1982 . Your domicile is your domicile of origin unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice you would have both lawful physical presence in a foreign country and an intention to make your home indefinitely in that country. Your domicile continues until you have acquired a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts. | Detailed Reasoning - Application to your circumstances: You were both born in Australia and your domicile of origin is Australia. On XXXX, you relocated to Country A and have stayed there since, except for short trips for business or holiday purposes. You have obtained permission to stay in Country A with a resident permit until XXXX, at which point it can be renewed. You intend to renew your resident permits. You have also entered into a long-term lease for a property in Country A which has become your family residence. You have also purchased a motor vehicle, you have hired a full-time nanny, provided the nanny with accommodation in Country A, hired a full-time private chef in Country A and you have also joined local memberships. Your conduct and behaviour are consistent with your intention to make your home indefinitely in Country A, while having a lawful physical presence in Country A. This combined with limited to no physical presence in Australia since your relocation indicate you have abandoned your domicile of choice in Australia. Therefore, since XXXX you changed your domicile of choice to Country A. Permanent place of abode If you have an Australian Domicile, you are an Australian resident unless the Commissioner is satisfied that your permanent place abode is outside Australia. This is a question that is determined with all relevant facts and circumstances of each case. The word 'permanent' does not mean everlasting or forever but is used in sense of being contrasted from temporary or transitory. Where the phrase "place of adobe" refers to the physical surroundings in which you live, extending to a town or country. It does not extend to more than one country or region of the world. In Harding v Commissioner of Taxation [2019] FCA, the court at paragraphs 36 and 40 outline key considerations in determining whether a taxpayer has their permanent place of abode outside Australia being: • Whether the taxpayer has abandoned their residency in Australia, and • Whether the taxpayer commenced living in a town, city or country in a permanent way. | Detailed Reasoning - Application to your circumstances: The Commissioner is satisfied that your permanent place of abode was outside Australia from XXXX because: • Your intention is to remain in Country A indefinitely. You have obtained your resident permits and intend to keep renewing them as the Country A authorities allow. • You established a permanent place of residence in Country A by entering into a long-term residential lease for the Apartment A which commenced XXXX. • You entered into a plan with an internet service provider in Country A to connect the Apartment A to the internet. • You took out an insurance policy with respect to the Apartment A. • You have sold the Australian property you owned and lived at. You only retain an Australian property for investment purposes only. • You purchased furniture in Country A and had your household and personal effects shipped to Country A . • You purchased and insured a motor vehicle in Country A. • You advised the AEC of your overseas relocation and you are no longer enrolled on the Australian Electoral Roll. • You informed Medicare of your overseas relocation. • A obtained a Country A mobile number and entered into a 24-month mobile plan with XXXX. • You opened an everyday bank account with a bank in Country A which you use to pay your daily expenses, including the rent payments for the Apartment A. • You hired a full-time nanny and housekeeper in Country A for your child. • You hired a full-time chef in Country A. • B joined memberships in Country A. The place of abode refers to the physical surroundings in which your live, extending to a town or country. However, satisfying this definition does not indicate one permeant place abode, where other factors of length overseas stay, nature of accommodation and durability or association combined with intention, conducted and objective connections must be considered. Your length of overseas stay, nature of accommodation and durability of association in Country A describes someone who has abandoned Australia as a place of residency and commenced living permanently overseas. You set up a residence in the foreign country, live there with your family, and have the intention to remain in Country A indefinitely. You have also limited your association with Australia by selling your business and properties, having no social ties remaining in the country while establishing associations within Country A by joining local memberships, and purchasing assets like a motor vehicle and furniture, and renting property. All these factors, combined with your intention and conduct, indicate that you have abandoned your residency in Australia and commenced living permanently in Country A setting up a new permanent place of abode. | Detailed Reasoning - 183-day test: Under the 183-day test, the taxpayer is a resident if they have been present in Australia for 183 days for more in an income year, unless the Commissioner is satisfied in both: • The taxpayer's usual place of abode is overseas, and • The taxpayer's does not have an intention to take up residency in Australia. | Detailed Reasoning - Application to your circumstances: Usual place of abode outside Australia In the context of the 183-day test, a person's usual place of abode is the place they usually live and can include a dwelling or a country. A person can only have one usual place abode under the 183-day test. Relevant factors in considering whether your usual place of abode is outside Australia include: • Where you lived before and after your time in Australia • Where your possession and assets are located • The type of visa, and length of your stay • Your purpose of coming to Australia, and • Your travel arrangements. To determine whether you intended to take up residence in Australia, we look at evidence of relevant objective facts. 'Intend to take up residency' does not merely mean intend to stay for a long time. This means intending to live in Australia in such a manner that you would reside here. | Detailed Reasoning - Application to your circumstances: The Commissioner is satisfied that you did not intend to take up residence in Australia after you left for Country A on XXXX, and that your usual place of abode is outside Australia because: • You intended to stay in Country A for the foreseeable future< • You sold your two of your Australian properties and only hold one for investment purposes • You entered into a long-term lease for a property in Country A • You purchased a motor vehicle in Country A • You hired a full-time nanny and a full-time private chef inCountry A • You joined local memberships, and • You had all of your mail from redirected to your Country A residence. >These factors indicate you live Country A in such a manner that you reside there and that your usual place abode is outside Australia from XXXX. Commonwealth superannuation fund test An individual is classified as a resident of Australia if they are either a member of a superannuation scheme established by deed under the Superannuation Act 1990 or eligible employee for the purpose 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: You are not eligible to contribute to the Public Sector Superannuation Scheme (PSS) or Commonwealth Superannuation Scheme (CSS) superannuation funds. You are not, and have never been, Australian Commonwealth government employees. Therefore, you are not residents under this test.

Does Part IVA apply to this private ruling?: Part IVA of the Income Tax Assessment Act 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement. | If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax. | We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part. | If you want us to rule on whether Part IVA applies, we will need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply. | For more information on Part IVA, go to our website ato.gov.au/gaar