Compare documents

Are you a resident of Australia for tax purposes?

No. This ruling applies for the following periods: Year ended 30 June 20YY The scheme commenced on: DDMM20YY

You were born in Australia. You are only a citizen of Australia. You have a sibling who lives in Australia. You have an Australian driver's license. You are a member of a motorcycle and car club. You are registered for the Australian Electoral Commission and Medicare. You do not have private health insurance in Australia. From a previous relationship you have 3 children who were born in the years: 19YY; 19YY; and 20YY. All your children live in Australia. On DDMM20YY, you jointly purchased the dwelling situated at Property A with your ex-spouse. XX of your children have a disability and are on the disability pension. You do not financially support your children. The children live rent free with your ex-spouse in Property A. Property A is currently on the market for sale. In 20YY, you solely purchased Property B in Country A. You have not used this property to produce income. When you are absent from the property it is left vacant. On DDMM20YY, you solely purchased the dwelling situated at Property C. You purchased Property C because your parent wanted to live in a property with some acreage. Property C was not used at any point to generate income. In MM20YY, you retired.

From MM20YY, you stayed with your father in Property C. In the 20YY income year, you were physically in Australia the whole year. For a few months in 20YY, you visited Country A. Your neighbours kept an eye over Property C while you were away. During this trip, you married Person A. Person A is a resident of Country A. Person A owns their home in Country A. This is the property you usually reside with them while in Country A. You do not have children with Person A. Person A has a young adult child from a previous relationship that lives with them in Country A. Your non-immigrant Country A marriage visa allows you to stay in Country A for XX months, with XX days reporting to immigration. You do not intend to apply for permanent residency or citizenship in Country A. You are a member of an enduro motorcycle club with Person A in Country A. You have redirected your mail to your sibling's address. For a period in the early 20YY income year, you returned to Australia and stayed in Property C. After departing Australia, you had a friend stay in the property free of charge, while you decided what you wanted to do. The friend only paid the electricity bill and maintained the property.

For a period, you were in Country A. For a period, you were in Country B. For a period, you were in Country A. For a day, you were in Country C. For a period, you were in Country A. For a period, you were in Australia. Your parent residing in Property C has passed. In or around MM20YY, Property C was emptied and painted in preparation for sale. You stored your belongings with family and friends as well as a storage shed at Property A. From DDMM20YY to DDMM20YY, you were in Country A. For a few days, you were in Country D. Since DDMM20YY, you have been in Country A. You have a contract drawn up by Firm A to sell Property C to a buyer. When completing incoming and outgoing passenger cards you state your Australian address as your home address. You own the following assets otherwise not mentioned in Australia: •  vehicle; •  motorcycle; •  caravan; and •  motorcycle trailer. You are not a resident of any foreign country for tax purposes. You intend to travel around Australia and foreign countries for the next few years. Person A will apply for a visitor (Tourist) visa when visiting Australia.

You are intending to sell Property C. The purchaser has agreed to buy Property C subject to them selling their own home within a year. You no longer receive any income from sources inside or outside of Australia. Currently, there is no time frame for Person A to apply for permanent residency in Australia. You have stated that you are unsure if you will be in Australia for more than 183 days in the 2026 income year, however you have indicated that you will not be at a fixed location and that you will be travelling around Australia. You intend to purchase another property in Australia. You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990 or an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976. Assumption For the purpose of this ruling, it is assumed that the facts of your situation as outlined above will not materially change during the ruling period and will continue until 30 June 20YY

Income Tax Assessment Act 1936 subsection 6(1). Income Tax Assessment Act 1997 section 995-1.

Summary As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the years ended 30 June 20YY and 20YY. 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: 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. Application to your situation You are not a resident of Australia under the resides test for the period 20YY and 20YY income years based on the following: •  Physical presence -  In the 20YY income year, you were not physically in Australia. -  In the future 20YY income year, you are unsure if you will be in Australia for more than 183 days. -  In the future 20YY income year, while in Australia you will be travelling around.

•  Intention or purpose -  You intend to return to Australia in the future and purchase another property. •  Behaviour -  You no longer receive any income from sources inside or outside of Australia. -  You are registered for the Australian Electoral Commission and Medicare. •  Family or employment ties -  On DDMM20YY, you married Person A, who is a resident of Country A. -  There is currently no time frame for Person A to apply for Australian residency. They currently live with their young adult child in Country A in a home they solely own. -  You have X children residing in Australia from a previous married that you do not financially support. -  You maintain a relationship with your children. •  Maintenance and location of assets -  You are the joint owner of Property A. Your ex-spouse resides in the property with your children. The property is currently on the market for sale. -  You are the sole owner of Property C. The property is currently on the market for sale. -  You own Property B in Country A. -  You own vehicles in Australia and Country A. •  Social connections -  You are a member of a motorcycle and car club in Australia.

-  You are a member of an enduro motorcycle club with Person A in Country A. -  You are retired. 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). 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. 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. Application to your situation

In your case, you were born in Australia and your domicile of origin is Australia. It is considered that you did not abandon your domicile of origin in Australia and acquire a domicile of choice in Country A. You are not entitled to reside in Country A indefinitely and while living in Country A, you only hold a non immigrant visa, which allows you to stay for XX months with options for renewal. Therefore, your domicile is Australia. 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] FCA 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. Application to your situation The Commissioner is satisfied that your permanent place of abode is outside Australia because: •  The duration and continuity of your presence in Country A. •  In the 20YY income year, you were not physically present in Australia. •  In XXMM20YY, you made the final preparations to sell Property C. •  You have 2 properties available to you in Country A. Your spouse owns one of these properties. •  You do not financially support anyone in Australia. We have also considered: •  Your intention to return to Australia in the future. •  Your visa in Country A only allows you to stay 1 year at a time but has renewal options.

Therefore, you are not a resident of Australia under the domicile test. 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. Application to your situation 20YY income year You have not been present in Australia for 183 days or more during the 20YY income year. Therefore, you are not a resident under this test. Future 20YY income year You have stated that you may be physically in Australia for 183 days or more in the 20YY income year. Therefore, you will be a resident under this test unless the Commissioner is satisfied that your usual place of abode was outside Australia, and you do not have an intention to take up residence in Australia. Usual place of abode for the 20YY income year

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 have only one usual place of abode under the 183 day test. However, it is also possible that a person does not have a usual place of abode. This is the case for a person who merely travels through various countries without developing any strong connections. If a person has places of abode both inside and outside Australia, then a comparison may need to be made to determine which is their usual place of abode. When comparing two places of abode of a particular person, we will examine the nature and quality of the use which the person makes of each particular place of abode. It may then be possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the person's usual place of abode: Emmett J at [78] in Federal Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836. Application to your situation

The Commissioner is satisfied that your usual place of abode will be outside of Australia for the relevant 20YY income year based in the following: •  You are in the process of selling Property C and it is not available to you to use in the 20YY income year. •  Property B in Country A is always available to you in the 20YY income year. •  Your spouse's property in Country A is always available to you. •  In the 20YY income year, you will be travelling while in Australia and other countries. 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. 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. Conclusion

As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the years ended 30 June 20YY and 20YY.