Tax non-resident of Australia

: Is the Taxpayer a tax non-resident of Australia pursuant to subsection 6(1) of the Income Tax Assessment Act 1936 ('ITAA 1936') after his permanent departure from Australia on DD MM YYYY?

: Yes This ruling applies for the following periods: DD MM YYYY to DD MM YYYY

Background Facts 1.      The Taxpayer was born on DD MM YYYY in Australia. 2.      The Taxpayer's spouse is Taxpayer X. 3.      The Taxpayer has one dependent child, Child X. 4.      The Taxpayer has two adult children, Taxpayer Y and Taxpayer Z. 5.      The Taxpayer, his spouse and children are residents for Australian income tax purposes as at DD MM YYYY, as they ordinarily resided in Australia in the year. 6.      The Taxpayer's extended family live in Australia. Employment 7.      The Taxpayer was formerly employed in Australia by Company A to DD MM YYYY. 8.      On DD MM YYYY, The Taxpayer commenced employment with Company B as the company's Managing Director. 9.      Company B was incorporated in XXX. 10.   Company B is a tax resident of XXX and tax non-resident of Australia. 11.   The Taxpayer will receive remuneration from Company B for the services of his employment exercised for the company. 12.   The Taxpayer's employment contract specifies his primary place of work is in XXX. 13.   The Taxpayer will 'work from home' in YYY every Friday where his schedule allows.

14.   The Taxpayer will travel to other countries for work purposes, as is normal in a global chief executive role. 15.   The Taxpayer will hold the position with Company B for a minimum period of x years. Living and social arrangements 16.   The Taxpayer was on annual leave in the period DD MM YYYY - DD MM YYYY. 17.   The Taxpayer was working overseas in the period DD MM YYYY - DD MM YYYY. 18.   The Taxpayer returned to Australia on DD MM YYYY to work, pack up his belongings and sort his affairs in Australia before leaving permanently on DD MM YYYY. 19.   Taxpayer X and Child X relocated to XXX on DD MM YYYY where they now live permanently. 20.   The Taxpayer signed a lease agreement on DD MM YYYY for a property in XXX. The XXX home is leased for a term of x years with an option to extend the lease. 21.   Child X is enrolled in school in XXX. 22.   The Taxpayer, his spouse and child will be involved in social activities in XXX. 23.   The Taxpayer's adult children will continue to reside in Australia as they complete undergraduate studies at university. 24.   The Taxpayer has also rented an apartment in YYY which is available to him at all times.

25.   The YYY apartment is only rented for convenience as the Taxpayer will spend approximately x working days a week in YYY for work purposes only. 26.   The Taxpayer will routinely return to his home in XXX where his family will reside permanently. Trips to Australia 27.   The Taxpayer will return to Australia after DD MM YYYY for short periods. 28.   The Taxpayer will not reside in Australia for 183 days or more in a year of income, for the x years from DD MM YYYY. 29.   Trips to Australia after DD MM YYYY will be for business purposes and/or to visit family during annual leave periods. 30.   The Taxpayer will not spend more than four weeks in a year of income in Australia for holidays during annual leave periods. 31.   The Taxpayer's incoming passenger cards will be marked as 'visitor or temporary entrant' and XXX will be recorded as the Taxpayer's country of residence. 32.   The Taxpayer will not have a settled routine on return trips to Australia. Assets in Australia 33.   The Taxpayer owns a property in Australia which was his former principal place of residence.

34.   The Taxpayer is retaining the property, so it is available to his adult student children who reside in Australia and for himself personally, spouse and dependent child for any work or holidays to Australia. 35.   The Taxpayer has no financial need to sell the property in Australia and holding property in Australia is a good investment. 36.   The Taxpayer has Australian bank accounts which he will retain for convenience. 37.   The Taxpayer owns x investment properties in Australia. X properties are rented to third parties and the other property is in the process of being developed to rent in the future. 38.   The Taxpayer also owns an investment property in Australia which is being developed to rent in the future. 39.   The Taxpayer does not hold any other investment assets (such as shares or units) in his own name. 40.   The Taxpayer is a member of his family's self-managed superannuation fund ('SMSF'), the XYZ Super Fund. 41.   The Trustee of the XYZ Super Fund is Company XYZ. 42.   Taxpayer X is the only other member of the XYZ Super Fund. 43.   The Taxpayer and his spouse have been removed as directors of XYZ Super Fund and will not be involved in decisions about the fund.

44.   The Taxpayer and his spouse have both appointed an attorney in Australia under an ordinary enduring power of attorney in respect of financial matters. 45.   The Taxpayer, his spouse and dependent child are not members of a superannuation scheme established by deed under the Superannuation Act 1990 (the Public Sector Superannuation Scheme). 46.   The Taxpayer, his spouse and dependent child are not eligible employees for the purposes of the Superannuation Act 1967 (the Commonwealth Superannuation Scheme). 47.   The Taxpayer is a beneficiary of an Australian resident discretionary trust. 48.   The Trustee of the discretionary trust is an Australian proprietary company limited by shares. 49.   The Taxpayer is not a director or shareholder of the Trustee company. 50.   The Trustee has no plans for the discretionary trust to be vested as it holds investments, it is impractical to dispose these assets and there is no immediate need to do so. Assets and economic ties overseas 51.   The Taxpayer has bank accounts in YYY and XXX. 52.   The Taxpayer's salary and wages are paid into his YYY bank account by his YYY employer.

53.   The Taxpayer will transfer funds to his XXX bank account to cover his personal living expenses and those for his spouse and dependent child. 54.   The Taxpayer has personal belongings in his home in XXX. 55.   The Taxpayer has a motor vehicle in XXX. 56.   The Taxpayer will obtain a drivers' licence in XXX and YYY in the coming months. 57.   It is likely that the Taxpayer acquires other assets overseas over time and in the course of living in XXX. Foreign tax implications 58.   The Taxpayer is a tax resident of XXX and ZZZ after his permanent departure from Australia and a tax non-resident of YYY. 59.   The Taxpayer is required to lodge an income tax return with the tax authorities of country XXX and country YYY. Long term plans 60.   As is normal, the Taxpayer's initial term of contract for his overseas role is x years and there are no set plans at the time of writing for the Taxpayer to return to Australia. 61.   The Taxpayer's spouse and dependent child will reside with the Taxpayer in the year ended DD MM YYYY. Information provided 62.   You have provided a number of documents containing detailed information in relation to the Taxpayer's application, including:

•                     Private Binding Ruling ('PBR') Application, dated DD MM YYYY 63.   We have referred to the relevant information within these documents in applying the relevant tests to your circumstances.

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

All legislative references are to the Income Tax Assessment Act 1936 ('ITAA 1936') unless otherwise stated. SUMMARY The Taxpayer is not considered to be a resident of Australia for the purposes of subsection 6(1) of the Income Tax Assessment Act 1936 for the financial year ended 30 June 2024. DETAILED REASONING Residency for Tax Purposes 64.   Subsection 995-1(1) of the ITAA 1997 provides that a person is an 'Australian resident' if that person is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 ('ITAA 1936'). 65.   The definition of 'resident' is outlined in subsection 6(1) of the ITAA 1936 as follows: (a) a person, other than a company, who resides in Australia and includes a person: (i) whose domicile is in Australia, unless the Commissioner is satisfied that his permanent place of abode is outside Australia; (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 his usual place of abode is outside Australia and that he does not intend to take up residence in Australia; 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). 66.   The definition in subsection 6(1) of the ITAA 1936 offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These statutory tests are commonly referred to as: i.                the 'residence according to ordinary concepts' test (the 'resides test') ii.                the 'domicile and permanent place of abode' test (the 'domicile test') iii.                the '183 day' test, and iv.                the 'Commonwealth superannuation fund' test. 67.   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'.

68.   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, the 183-day test and the Commonwealth superannuation fund test). 69.   Consequently, only one of the above four statutory tests needs to be met for an individual to be considered an Australian resident for taxation purposes. The 'Resides' Test 70.   The term 'resides' is not defined in either the ITAA 1936 or the ITAA 1997. Taxation Ruling TR 2023/1 "Income Tax: Residency test for individuals" ('TR 2023/1') provides guidance on the Commissioner's interpretation of the ordinary meaning of the word 'resides' as set out in subsection 6(1) of the ITAA 1936. 71.   Paragraph 10 of TR 2023/1 states that the residency status of a taxpayer is a question of fact based on an individual's connection to Australia. 72.   To determine the ordinary meaning of the word 'resides', dictionary definitions of the term can be relied on. The following definitions are provided in paragraph 19 of TR 2023/1: The Macquarie Dictionary

defines 'reside' 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'. 73.   Paragraph 25 of TR 2023/1 provides that the physical presence or length of time in Australia alone is not decisive of whether an individual resides in Australia and an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing in Australia. Similarly, the quality and character of a taxpayer's behaviour while in Australia assists in determining whether the individual resides here, as per paragraph 20 of TR 2023/1. 74.   Paragraph 20 of TR 2023/1 provides that the following factors are useful in describing the quality and character of an individual's behaviour: •                     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.

75.   Paragraph 41 of TR 2023/1 explains that when looking at an individual's behaviour, their behaviour relevantly includes the way they live as part of the regular order of their life. If the way they live reflects a degree of continuity, routine or habit, coupled with other factors such as intention, it may be consistent with residing in Australia. 76.   Paragraph 31 of TR 2023/1 states that an individual's intention, purpose or reason for being in Australia assists in determining whether an individual resides here. Paragraph 33 of TR 2023/1 provides that a settled purpose, such as pre-arranged long-term employment or a course of education, may support an intention to reside in Australia. 77.   The meaning of 'family and business/employment ties' is explained in paragraphs 46 to 50 of TR 2023/1. Paragraph 46 of TR 2023/1 states that the presence of an individual's family is a factor that may indicate that individuals are residing in Australia.

78.   When considering the maintenance and location of assets, paragraph 51 of TR 2023/1 provides that occupying a dwelling in Australia that the individual owns or is purchasing, suggests establishment of a home in Australia. The presence of other assets in Australia, such as motor vehicles, superannuation investments and bank accounts also add further weight to the individual having established behaviour consistent with residing here. 79.   Paragraph 53 of TR 2023/1 states that social and living arrangements can also be considered in determining whether an individual resides in Australia for tax purposes. This factor involves the consideration of the way individuals interact with their surroundings, which may include joining sporting or community organisations, or enrolling children in school, during their stay in Australia. 80.   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. 81.   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 the 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. 82.   The Commissioner also noted various factors commonly inform a connection in Taxation Ruling TR 2023/1 and considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test: •                     Physical presence •                     Intention or purpose of presence •                     Family and business/employment ties •                     Maintenance and location of assets, and •                     Social and living arrangements. 83.   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.

84.   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. The 'domicile' test 85.   An individual is a resident of Australia according to the domicile test if the individual is domiciled in Australia, unless the Commissioner is satisfied that the individual has a permanent place of abode outside of Australia. 86.   As set out in paragraphs 56 - 62 in TR 2023/1, 'domicile' is described by the Commissioner as follows:

"Domicile" is a legal concept to be determined according to the Domicile Act 1982 and to the common law rules which the courts have developed in the field of private international law. The primary common law rule is that a person acquires at birth a domicile of origin, being the country of his or her father's permanent home. This rule is subject to some exceptions. For example, a child takes the domicile of his or her mother if the father is deceased or his identity is unknown. A person retains the domicile of origin unless and until he or she acquires a domicile of choice in another country, or until he or she acquires another domicile by operation of law... 87.   Accordingly, your domicile in Australia is determined by the Domicile Act 1982 and the common law rules on domicile.

88.   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. 89.   A person acquires a domicile of choice in a country by being lawfully present there with the intention of remaining in that country indefinitely. The two elements of physical presence and intention must occur at the same time. 90.   Davies and Steward JJ in Harding FFC stated as follows at [29] and [30] with respect to "domicile":

29. It is appropriate to deal with Mr Harding's appeal first. The primary judge adverted to a tension which he considered seemed to exist between the concepts of "domicile" and that of a "permanent place of abode". On one view, if a person chooses to make her or his permanent place of abode outside of Australia, one might also think that that person had ceased to be domiciled in this country. Some of the criteria for determining a person's domicile may now be found in the Domicile Act 1982 (Cth) (the "Domicile Act"). Section 10 of that Act provides: The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his or her home indefinitely in that country. 30. Part of the tension observed by the primary judge may be the product of possible differences between the common law concept of a person's domicile and the consequences of the statutory changes made to that common law by the Domicile Act. In Terrassin v Terrassin

(1968) 14 FLR 151, Selby J observed that a person alleging a change of domicile had to prove by "clear and cogent evidence that the change has taken place" (at 154-155). His Honour referred to the decision of Lord Curriehill in Donaldson v M'Clure (1857) 20 D. 307, where his Lordship said: ... it is proper to keep in view what is meant by an animus or intention to abandon one domicile for another. It means something far more than a mere change of residence. It imports an intention not only to relinquish those peculiar rights, privileges, and immunities which the law and constitution of the domicile confer on the denizens of the country,-in their domestic relations ... in their purchases and sales and other business transactions ... in their political or municipal status,-and in their daily affairs of common life; but also the laws by which the succession to property is regulated after death. 91.   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 based on all the facts and circumstances of each case.

92.   'Permanent' does not mean everlasting or forever, but it is to be distinguished from temporary or transitory. 93.   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. 94.   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. 95.   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; and •                     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. 96.   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.

The '183 day' test 97.   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. The 'Commonwealth Superannuation Fund' test 98.   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 CIRCUMSTANCES The 'Resides' Test 99.      In consideration of the statutory tests detailed above, we consider that the Taxpayer is an Australian tax non-resident after his departure from Australia on DD MM YYYY. Taking into account the Taxpayer's circumstances, we have concluded that he is not a resident under the 'resides' test. 100.    The following factors are relevant in reaching this conclusion:

•                     The Taxpayer is employed by a YYY company for a minimum fixed term of x years with an option to extend the term. This is substantial as per TR 2023/1 at paragraph 77. •                     The Taxpayer generally works x days a week in YYY and x day a week from his home in XXX, except when travelling for work. •                     The Taxpayer's home in Australia is not his base from which he leaves to work overseas and to which he always returns. •                     The Taxpayer travels to YYY and other countries globally for work but returns to his home in XXX. •                     The Taxpayer's lifestyle of working and living outside of Australia means he does not regard the Australia property as his home. •                     The Taxpayer's immediate family (his wife and dependent child) relocated with him to XXX where they also live permanently. •                     The Taxpayer set up his home in XXX and his personal effects are in XXX. •                     The Taxpayer's dependent child is enrolled in school in XXX. •                     The Taxpayer and his spouse engage in social activities in XXX.

101.    Therefore, the Taxpayer is not a resident of Australia under the 'resides' test. The 'domicile' test 102.    The Taxpayer was born in Australia in YYYY and resided here until DD MM YYYY. On that date The Taxpayer, his spouse, and dependent child departed Australia for XXX. 103.    The Taxpayer has arranged permanent accommodation in XXX for himself and his immediate family by leasing a home in XXX for a period of x years with an option to extend the lease. 104.    The Taxpayer has also leased an apartment in YYY due to the ongoing requirement to work in YYY. This suggests his presence overseas is permanent. 105.    The Taxpayer does not live a transient life overseas consistent with Hughes v FC of T [2016] ATC and his travel pattern is consistent with global chief executives who are often based in one country but frequently travel to other countries for work.

106.    The Taxpayer has retained significant assets in Australia for convenience only. The maintenance of his former principal place of residence and investments in Australia does not illustrate a continuity of association consistent with residing in Australia nor does it outweigh his intention and the objective facts that support the premise that the Taxpayer resides overseas. 107.    The Taxpayer's choice to maintain his former principal place of residence in Australia is not determinative. This is on the basis that: •                     The Taxpayer's adult children still live in the Australia property when not at university; •                     The Taxpayer may be required to return to Australia for work on occasion; •                     The Taxpayer does not have any financial need to sell the property; and •                     it is convenient for the Taxpayer to stay at the property on return trips to visit his family. 108.    It is also impractical for the Taxpayer to dispose of other assets in Australia because he has simply relocated overseas. 109.    These ties to Australia are less significant on balance. This position is consistent with Derrington J in

Harding v FC of T [2019] ATC at [86]. 110.    The Taxpayer will return to Australia as a visitor for business or to visit family. These trips will be casual and fleeting, and Taxpayer will not recommence a preestablished routine consistent with living in Australia. 111.    The Taxpayer does not have any intention to reside in a permanent way in Australia. 112.    Therefore, the Taxpayer is not a resident of Australia under the 'domicile' test. The '183 day' test 113.    The Taxpayer will not be physically present in Australia for 183 days in the year ended DD MM YYYY and accordingly, the 183-day test is not satisfied. 114.    Consequently, the Taxpayer did not satisfy the '183 day' test pursuant to subparagraph 6(1)(a)(ii) of the ITAA 1936. The 'Commonwealth Superannuation Fund' test 115.    The Taxpayer, his wife and dependent child are not members of the Public Sector and Commonwealth Superannuation Scheme. The Taxpayer has not satisfied the Commonwealth Superannuation Test in subparagraph 6(1)(a)(iii) of the ITAA 1936. As such, the 'superannuation' test is not satisfied. 116.    The Taxpayer is not a resident of Australia under the 'superannuation' test. CONCLUSION

On the basis that the four residency tests in subsection 6(1)(a)(ii) of the ITAA 1936 are failed after the Taxpayer departed Australia permanently on DD MM YYYY, the Taxpayer is a tax non-resident of Australia on DD MM YYYY onwards. Therefore, the Taxpayer is considered to be a tax non-resident of Australia for the purposes of subsection 6(1) of the Income Tax Assessment Act 1936 for the financial year ended DD MM YYYY. ATO view documents Taxation Ruling TR 2023/1 ('TR 2023/1') - " Income tax: Residency test for Individuals." Other references (non ATO view) Peel v The Commissioners of Inland Revenue (1927) 13 TC. Levene v The Commissioners of Inland Revenue (1928) AC 217; (1927-28) 13 TC 486. Miller v FCT (1946) 73 CLR 93 at 99. Lysaght v. IR Commrs (1928) 13 TC 511. Udny v Udny [1869] LR 1 Sc & Div 441. Federal Commissioner of Taxation v. Applegate (1979) 79 ATC 4307; 9 ATR 899. R v Hammond (1852) 177 ER 1477.