Residency

1 Are you a resident of Australia for the purpose of subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for the period from 30 June 20XX to X March 20XX (ruling period 1)?

1 No. Question 2 Are you a resident of Australia for the purpose of subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) from X March 20XX until 30 June 20XX (ruling period 2)? Answer 2 Yes. This ruling applies for the following periods : Year ended 30 June 20XX Year ended 30 June 20XX Year ended 30 June 20XX Year ended 30 June 20XX Year ended 30 June 20XX Year ending 30 June 20XX The scheme commenced on: XX X 20XX

Personal and family background You are an Australian citizen and have been since you acquired citizenship during an earlier period you resided in Australia over XX years ago. You were born in Country B and are also a permanent resident of Country A. You migrated to Country A when you were a child. Your own family includes your late spouse and five children. Two of your children are Australian citizens and currently live with you. Over XX years ago you migrated from Country A to Australia. At this time, your spouse remained in Country A with some of your children. After living in Australia for some years you departed Australia and returned to Country A. Timeline of travel movements in and out of Australia Over XX years ago you migrated to Australia. Less than XX years later you departed Australia and returned to Country A to live. For XX days in ruling year 1 you visited Australia to look for property to purchase. on XX XX 20XX you entered into a contract to purchase Property A. Ruling year X you visited Australia to plan your move into Property A. You stayed in an AirBnB on this trip and did not reside in the property. Ruling year X you visited Australia to inspect the Property A.

Ruling year X you returned to Australia to sell the Property A, and during that same trip you purchased Property B. Ruling year X you travelled to Country A to arrange your belongings to be shipped to City B. Ruling year X on X XX 20XX you returned to Australia. Ruling year X on XX XX 20XX you commenced living at Property B. On XX XX 20XX you returned to Country A for a scheduled surgical procedure which was to take place on the XX XX. After you arrived in Country A this procedure was rescheduled to the XX XX 20XX. You are still in the recuperating period and you intend to return to City B to live in Property B in XX 20XX. This being the time period recommended by your specialist as safe for traveling. Summary of time in Australia and the financial years Financial Year Time in Australia as a percentage Ruling year 1 12% Ruling year 2 3% Ruling year 3 0% Ruling year 4 0% Ruling year 5 0% Ruling year 6 32% Properties owned/inhabited Australia Property E - 19XX - 19XX During your earlier period of residence in Australia you purchased the Australia Property E. You lived at the Australia Property E with one of your children until you returned to Country A.

After you left Australia, you rented out the Australia Property E until you sold it over XX years ago. Country A Property C - late 19XX- 20XX You moved into property C in Country A after departing Australia in late 19XX . You continued to live in Country A with your family until you moved to Country B in 20XX. Country B Property D 20XX- 20XX You purchased the Country B Property C in 20XX. Following the sale of the family's Country A residence, you purchased the Country B Property D. Property D was subsequently used as the family home in Country B. Property D was sold pursuant to a contract of sale dated XX XX 20XX. Australia Property A owned not lived in from XX XX 20XX until XX XX 20XX. You purchased the Australia Property A on XX XX 20XX. You made preparations to move into the Property A, however; you never physically resided there. You made a number of visits to Australia in advance of moving into the property and had furniture delivered to the property. The Australia Property A was never rented out or used for any income producing purpose. Australia Property B - XX XX 20XX You executed a contract to purchase the Australia Property B on XX XX 20XX.

Settlement of the property occurred on XX XX 20XX. The furniture from the Australia Property A was transported to the Australia Property B, arriving on XX XX 20XX. Decision to relocate back to Australia and reason for delays. On XX XX 20XX, you and your family visited the City A and City B in Australia to evaluate suburbs and suitable properties. During that trip, you explored neighbourhoods, attended open houses, and spoke with real estate agents. You also returned to Australia on the following occasions: (a) Ruling year 1- You and your late spouse returned to Australia to search for properties. (b) Ruling year 1 - You returned to City A with one of your children for further house-hunting. On XX XX 20XX, following your return to Australia, you entered into a contract to purchase Australia Property A. (c) Ruling year 2 - you returned to Australia to plan for the move into the Australia Property A. At this time, you reactivated and applied for your Driver Licence, and Medicare card. You are currently on the electoral roll and voted. After purchasing the Australia Property A, the following incidents delayed your plans to move to Australia:

(a) the political unrest in Country A in mid 20XX; (b) the commencement of the COVID-19 pandemic in early 2020 and subsequent restrictions on travel; and (c) diagnosis of the terminal illness of your late spouse on XX XX 20XX. Your late spouse's terminal illness. For a number of years after you purchased Australian Property A your late spouse underwent treatment in Country A for a terminal illness. You resided in Country A for this duration. On XX XX 20XX, your late spouse passed away in Country A. Return to Australia You returned to Australia on XX XX 20XX to inspect the Australia Property A following funeral ceremonies for your late spouse. You sold Australian Property A, and during that same trip you purchased the Australian Property B with the intention of residing in Property B permanently. You subsequently returned to Country A to pack your belongings. You returned to City B on XX XX 20XX and resided in the Australia Property B.

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

Issue- residency Question 1 Are you a resident of Australia for the purpose of subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for ruling period 1? Answer 1 No Question 2 Are you a resident of Australia for the purpose of subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for ruling period 2? Answer 2 Yes 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 Ruling period 1 You are not a resident of Australia under the resides test from XX XX 20XX until XX XX 20XXbased on the following: •                     You were physically present overseas in Country A and Country B where you lived most of the time apart from brief visits to Australia until your returned to live in City B, Australia at the start of ruling period 2. •                     Your immediate family lived in Country A and Country B. •                     You owned and resided in multiple properties in both Country A and Country B. •                     You sold your initial Australian property in City A over 20 years ago, after renting it out for a short number of years. •                     You never resided in Australian Property A.

•                     You had previously established social and business connections in Country A and Country B. •                     You did not physically reside in Australia until you returned to live in your Australia Property B. 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). Ruling period 2 You are a resident of Australia under the resides test for the period from XX XX 20XX based on the following: •                     You packed all your belongings from your Country A residence. •                     You purchased the Australian Property B with the intention to reside there. •                     You arrived in Australia with two of your children to live in Australian Property B. •                     You resided in the Australia Property B from the start of this period. Although the law only requires you to be considered a resident under one test, for completeness the other tests are also considered. 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 Country B, and your domicile of origin is Country B. However, your domicile became Country A when your parents migrated there during your childhood. You immigrated to Australia and became an Australian citizen, indicating that you acquired a domicile of choice in Australia. However, shortly after you obtained citizenship you departed Australia and returned to Country A. You did not return to take up residence in Australia until ruling period 2. The case - Hyland v Hyland (1971) 18 FLR 461 at [467] states that when considering intention, we have regard to objectively observable conduct. While assertions of intention will always be relevant, if there is a difference between that assertion and the conduct, we may rely on the conduct. Ruling period 1 While we acknowledge it was your intention to return to Australia at some future stage when circumstances permitted the following observable conduct do not support Australia as your domicile during this period: •                     significant period of absence, •                     family/social connections in Country A and Country B,

•                     no defined time frame of when you were returning, and •                     the purchasing and treating of property in both Country A and Country B as your main residence. It is considered that you abandoned your domicile in Australia and reverted to your domicile in Country A during this period. Ruling period 2 We acknowledge it was your intention to return to Australia and the following observable conduct supports the finding that Australia is your domicile of choice during this period: •                     You packed all your belongings from your Country A residence. •                     You purchased a property in City B in Australia. •                     You moved to Australia with two of your children and resided in Property B in Australia and will reside here permanently. Therefore, your domicile is Australia for this period. 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 Ruling period 2 The Commissioner is satisfied that your permanent place of abode is Australia because:

•                     You packed all your belongings from your Country A residence. •                     You purchased a property in City B in Australia. •                     You moved to Australia with your two daughters to live in Property B with the intention to stay permanently in Australia. Therefore, you are a resident of Australia under the domicile test for 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 have not been present in Australia for 183 days or more during any of the years in the ruling. Therefore, you are not a resident under this test. 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 Ruling period 1 While it may have been your intention to return to Australia once the circumstances permitted, the extended time spent in both Country A and Country B as well as the establishment of homes and other social/business connections means your actual conduct does not support you being considered a resident of Australia during this time. As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for ruling period 1. Ruling period 2 You returned to Australia at the start of this period to commence residing in Property B. As such, you are a resident of Australia for ruling period 2.