Residency

1 Were you a resident of Australia for taxation purposes from the start of the ruling period until your arrival in Country X?

Yes. Question 2 Were you a resident of Australia for taxation purposes during the period after your arrival in Country X until the end of the ruling period? Answer No. This ruling applies for the following period : Income year ended 30 June 20XX. The scheme commences on: 1 July 20XX.

Background Your domicile is Australia, and you are a citizen of Australia. Your spouse (Person A) was offered an employment contract in Country A for a specified period, being several years, within the company he worked for. You and Person A travelled to Country A with your children (Person B and Person C). Your family's intention was to return to Australia at the end of Person A's employment contract so that Person A could resume their employment position in Australia. You and your family continued to reside in Country A for a period before returning to Australia earlier than planned due to the COVID-19 pandemic. Person A was offered a permanent position in Country X, which they accepted as it provided them with a better salary and position than they had in relation to their Australian employment. Ruling period At the beginning of the ruling period, you and your family made the choice to make your home indefinitely outside of Australia. You and your family were in Australia for a short period at the beginning of the ruling period before departing on Date 1 to travel to Country X, arriving on the same date.

You, Person A and Person B travelled to Country X on visas. Person C did not need a visa due to them being a citizen of Country X. Neither you, nor any of your family members had any return flight/s booked, nor had any return tickets been cancelled. Person A is employed in Country X under an employment contract for no fixed term, on a permanent full-time basis. You and your family originally lived in temporary corporate rental accommodation provided by Person A's employer for some months as part of their relocation terms while sourcing suitable long-term accommodation for you and your family in Country X. Person A entered a long-tern lease which ends after the ruling period, for which they are responsible for the cost of the accommodation. Your children commenced schooling at the start of the school year in Country X and have continued with no defined end to the enrolment period. Your children are registered members of several sporting organisations, with the whole family becoming members of the local sporting club in Country X. You have the following in the Country X: •         your family's furniture and belongings which were transported from Australia to the Country X

•         motor vehicles; and •         jointly held checking account with Person A. Applications to register your permanent residence in Country X were lodged for you, Person A and Person B with the relevant authority in Country X, which have been approved. You and your family do not intend returning to Australia, and had not returned to Australia during ruling period after your arrival in Country X. It is anticipated that you and your family will return to Australia to visit extended family infrequently during holiday periods annually for short periods of several weeks. You have the following in Australia: •         superannuation account •         jointly owned property with Person A (the Property) which is used for rental purposes, and for which you received rental income during the ruling period. Your intention is to dispose of the Property. •         joint savings account with Person A •         joint mortgage account with Person A for the Property; and You do not have any employment position being held for you in Australia. Neither you nor any members of your family have any social and/or sporting connections in Australia.

You updated your status with the Australian Electoral Office to confirm your residency status in Country X. Neither you, nor Person A, are or were a Commonwealth Government of Australia employee for superannuation purposes.

Income Tax Assessment Act 1936 Subsection 6(1) Income Tax Assessment Act 1997 Subsection 995-1(1)

Summary You were a resident of Australia for taxation purposes from the beginning of the ruling period until you arrived in Country X. However, you were not a resident of Australia for taxation purposes from when you arrived in Country X until the end of the ruling period. Detailed reasoning Resident of Australia for taxation purposes 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 Draft Taxation Ruling TR 2022/D2 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... [W]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 ordinary concepts test is 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: Logan J in

Pike v Commissioner of Taxation [2019] FCA 2185 at 57 reminds us that 'it is no part of the ordinary meaning of reside in the 1936 Act that there be a "principal" or even "usual" place of residence. ... It is important that ... "resident" not be construed and applied as if there were such adjectival qualifications.' For this reason, the test is not about dominance or exclusivity. Application to your situation Period from beginning of the ruling period until you arrived in Country X (Date 1) You lived in Australia with your family after you returned from Country A until you and your family departed Australia to travel to Country X, arriving there on Date 1. Nothing has been provided to support that you had any strong ties to any overseas country/countries during the period you were in Australia. Therefore, for this period you are viewed as having met the resides test and were a resident of Australia for taxation purposes from the beginning of the ruling period until Date 1. Period from Date 1 to the end of the ruling period We have taken the following into consideration when determining whether you met the resides test for this period:

•         Physical presence - You had been physically present in Country X since Date 1. •         Intention or purpose - Your stated intention was to live in Country X long-term is evidenced by you establishing your home and life there with your family, and actively obtaining visas and permanent residency to enable you and your family to stay in Country X. •         Behaviour - Your behaviour since being in Country X shows that you and your family have settled there and reflects a degree of continuity, routine or habit that is consistent with residing in Country X. Your behaviour supports your stated intention to reside in Country X. •         Family and business/employment ties - You and your children had accompanied Person A to Country X for their employment, which is not for a fixed term. You have continued to live in Country X with your family until the present time with your children attending school in Country X.

•         Maintenance and location of assets - You have purchased assets in Country X and opened a credit savings account. Your household effects were transported from Australia to Country X. The Australian property in which you have an ownership interest is being used for rental purposes, with the intention to sell it. You have a superannuation fund in Australia in addition to having a joint savings account and mortgage account with Person A; and •         Social and living arrangements - You and your family have joined a local tennis club in Country X and your children are members of several sporting clubs and attend school which demonstrates a routine and habit associated with living in Country X. You and your family do not have any social and/or sporting connections in Australia. You and your family lived in accommodation provided by Person A's employer for several months before moving into long-term leased accommodation, with the lease ending after the ruling period.

You and your family have established your life in Country X after your arrival until the present time. While you have some assets in Australia, since your arrival you have displayed behaviour consistent with someone residing in Country X. Therefore, from the date you arrived in Country X until the end of the ruling period you are viewed as not being a resident of Australia for taxation purposes under this test. Domicile test 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. 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:

(a)   the intended and actual length of the taxpayer's stay in the overseas country (b)   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 (c)   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 (d)   whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence (e)   the duration and continuity of the taxpayer's presence in the overseas country; and (f)    the durability of association that the person has with a particular place in Australia, such as 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 We have considered the domicile test and where your permanent place of abode was during the following periods: Period from beginning of the ruling period until Date 1 In your case, you were born in Australia and your domicile of origin is Australia. Therefore, you would be viewed as being a resident of Australia under the domicile test during this period unless the Commissioner is satisfied you had established a permanent place of abode outside of Australia. You were living in Australia during this period, and nothing has been provided to support that your permanent place of abode was outside of Australia. Therefore, the Commissioner is not satisfied that your permanent place of abode was outside of Australia. As your domicile is Australia, and your permanent place of abode was Australia during this period, you are viewed as being a resident of Australia for this period. Period from Date 1 to the end of the ruling period As outlined above your domicile is Australia. However, for this period the Commissioner is satisfied that your permanent place of abode was in Country X after you arrived there because:

•         You and your family had resided in accommodation provided by Person A's employer in Country X for several months before you and your family moved into a long-term leased property, with the lease ending after the ruling period. •         You and your family had not travelled back to Australia after Date 1 with the intention to remain in Country X and only return to Australia for short visits in the future; and •         You, and Person A and Person B have obtained permanent residency in Country X. The duration and continuity of your and your family's presence in Country X supports your permanent place of abode was in Country X. You have actively undertaken the activities required to enable you to obtain permanent residency in Country X with the intention to live there indefinitely. Therefore, as the Commissioner is satisfied that your permanent place of abode was in Country X, you are not viewed as being a resident of Australia during this period. 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 You departed Australia shortly after the beginning of the ruling period, arriving in Country X on Date 1. Therefore, you were not present in Australia for 183 days or more during the relevant income year, having only been in Australia for several days. Therefore, you are not a resident of Australia under this test for the income year commencing 1 July 20XX to 30 June 20XX. 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 years of age, 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 years of age of such a person.

Therefore, you are not a resident of Australia for taxation purposes under this test. Conclusion As outlined above: •         You are viewed as being a resident of Australia for taxation purposes for the period from the beginning of the ruing period until Date 1 when you arrived Country X as you met the resides test for that period, your domicile is Australia, and the Commissioner does not accept that you had a permanent place of abode outside of Australia during that period; and •         You are not viewed as being a resident of Australia for taxation purposes for the period from Date 1 until the end of the ruling period as you did not meet the resides test, the 183 days test, or the superannuation test, and while your domicile is Australia the Commissioner is satisfied that your permanent place of abode during this period was in Country X.