Are you a resident of Australia for taxation purposes from 1 July 2024 to 30 June 2026?
Yes. This ruling applies for the following periods : Year ended 30 June 20YY The scheme commenced on: 1 July 20YY
You were born in the Country A. You are a citizen of Australia and Country A. You emigrated to Australia with your parents in 19YY. You departed Australia on DDMM20YY, accompanying your spouse who has a secondment to work in the Country A. The period of secondment is DDMM to DDMM20YY. Your spouse entered the Country A on a visa sponsored by their employer. Your spouse will return to their position with their employer in Australia following conclusion of their secondment. You have a right of abode to live in the Country a as a holder of a Country A passport. Your spouse is not a citizen or permanent resident of the Country A. You intend to return to Australia at the conclusion of your spouse's secondment. Your spouse's employer will fund your return flights. From DDMM to DDMM20YY, you stayed in hotel accommodation provided by your spouse's employer. On DDMM20YY you and your spouse leased an apartment in London until DDMM20YY. You have not returned to Australia since your departure. However, one of your parents recently passed away and you are executor to their estate. You will travel to Australia to administer the estate if required.
In MM20YY you and your spouse will travel to Australia to attend a wedding. You will be in Australia for approximately XX days. In MM - MM20YY you and your spouse will travel to Australia to attend another wedding. You will be in Australia for approximately XX days. You state you are an Australian resident on your incoming and outgoing passenger cards and provide your in-law parents' address. You do not own any overseas assets. You own an apartment in Australia where you and your spouse lived until you departed Australia. You have rented out the apartment under a 12 month lease commencing DDMM20YY. You own a motor vehicle which is stored at your in-law's home. You have put your household effects in storage. You hold three Australian bank accounts. You have not opened any bank accounts in the Country A. You hold investments in shares. You receive rental income and dividend income in Australia. You have not advised any Australian financial institutions that you are a foreign resident for non-resident withholding purposes. You have employment income in the Country A. You are working in the Country A on a 12 month contract that expires on DDMM20YY.
You have opted out of your Country A employment pension scheme. You will deposit concessional contributions from your Country A income into your Australian superannuation fund. You continue to service your Australian mortgage. You are a XX, but not registered to practise in the Country A. You will return to Australia to further your career. You have relatives and family in Australia. You are on a waiting list for XX membership. Your spouse is a XX member. You are registered with the Australian Electoral Commission as an overseas elector. You did not advise Medicare of your departure. You have not lodged any income tax returns in the Country A. You will lodge Australian income tax returns while in the Country A. You have retained your Australian mobile phone number. Neither you nor your spouse have been employed by the Commonwealth of Australia. You are not a member of the Public Sector Superannuation Scheme (PPS). You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS).
Income Tax Assessment Act 1936 subsection 6(1) Income Tax Assessment Act 1997 section 995-1
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 1 July 20YY to 30 June 20YY based on the following: • You departed Australian in MM 20YY with your spouse while they work in Country A. • You have employment in Country A. • You do not have employment in Australia. • You will travel to Australia for short periods. • You will stay with family when you visit Australia. • You have put any possessions and household goods in storage. • You have leased your home in Australia. • You have leased rental accommodation in Country A.
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 the Country A and your domicile of origin in Country A. You are a citizen of Australia and a citizen of Country A.
It is considered that you did not abandon your domicile of origin in 20YY.You hold a Country A passport and have a right to reside in Country A indefinitely; you remain a citizen of Australia. Therefore, your domicile is 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 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] FCAFC 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 not satisfied that your permanent place of abode is outside of Australia because you have been outside of Australia from DD MM 20YY. • You have accompanied your spouse while they work overseas for a finite period of two years. • You will return to Australia once your spouse's employment contract ends. • You have short term employment in Country A. • You have income from an Australian source. • You have rental accommodation in Country A. • You own a residence in Australia. Your residence is rented under a 12 month lease to service the mortgage while you are in Country A.
• You will resume living at the dwelling on your return to Australia. • You have not disposed of your personal and household possessions in Australia and they remain in storage for use on your return. • You maintain an Australian driver's licence. • You have registered with the Australian Electoral Commission as an overseas voter. • You will travel to Australia for short periods and will stay with family when you visit Australia. • You state you are an Australian resident on incoming and outgoing passenger cards and provide your in-law parents' address. • You hold bank accounts in Australia. • You hold investments with an Australian-based investment platform. • You have not advised any Australian financial institutions that you are a foreign resident for non-resident withholding purposes. Therefore, you are a resident of Australia under the domicile test, as your permanent place of abode remains in Australia based on intention to return and your continued connection. The move to the UK has a defined start and end date, with no intention to go beyond the agreed term of the secondment. 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 will not be present in Australia for 183 days or more in the 20YY and 20YY income years. Therefore, you are not a resident under this test for these income years. 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. 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
You satisfy the domicile test of residency and so are a resident of Australia for income tax purposes for the years ended 30 June 20YY and 30 June 20YY.