Tax Residency

We specialise in simplifying the complex world of tax residency so you can achieve the best tax outcome.

How can we help?

If you find yourself wondering whether your need to pay tax on your foreign income, we can assist by providing you with residency advice that confirms whether or not you are a foreign resident for tax purposes.

Our advice will not only confirm your status as a tax resident of Australia, it will also set out whether you will be taxed on overseas income and if capital gains tax is triggered when your tax residency changes.

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Get in touch.

Call us on (02) 8287 3118 or email us at [email protected]. We’re here to help and our first consultation is free of charge.

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Tell us your side of the story.  

We listen to understand your unique circumstances so we can determine whether you are an Australian tax resident or not.

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Let us determine your residency status.

We have advised countless clients on their residency status and helped them obtain the residency status they prefer.

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Common Questions

To determine whether an individual is an Australian resident for tax purposes it is necessary to consider:


The primary test to determine whether you are a resident of Australia is whether you reside in Australia according to ‘ordinary concepts’ (Ordinary Concepts Test). In addition to this test, section 6(1) of the ITAA36 provides that a ‘Resident’ or ‘Resident of Australia’ means:

Domicile Test

A person whose domicile is in Australia, unless their permanent place of abode is outside Australia.

 

183 Day Test

A person who has actually been in Australia (whether continuously or intermittently) for more than half a financial year, unless:

  • their usual place of abode is outside Australia; and
  • they do not intend to take up residence in Australia.

 

Superannuation Test

A person who is a member of a superannuation scheme established by deed under the Superannuation Act 1990 (Cth) or a person who is an eligible employee for the purposes of the Superannuation Act 1976 (Cth) (including a person who is the spouse, or a child under 16, of a person covered by this subsection).

 

If you satisfy any one of the above four tests, you will be considered an Australia resident for tax purposes.

The tax acts do not define the word ‘reside’. Instead, the courts have determined that to “reside” means to “dwell permanently or for a considerable time, to have one’s settled or usual abode, to live, in or at a particular place”.


You will be taken to have satisfied the Ordinary Concepts Test if you are taken to reside in Australia, having regard to the following factors:

Intention or purpose of presence

Where your purpose for being overseas is a ‘settled purpose’ (i.e. education or employment), there will be a clear indication that you are not an Australian resident for tax purposes. Generally, the Australian Taxation Office acknowledges that a person intends to remain overseas indefinitely if their intention is to remain outside of Australia for two or more years.

Family

The presence of family being with you overseas is also a clear indicator of your residency status. Alternatively, if the presence of family remains in Australia, this is a clear indicator of your status as an Australian resident for taxation purposes.

Business/employment ties

The establishment of business affairs (or the taking up of employment arrangements) overseas can indicate that you are a non-resident.

Maintenance / Location of Assets

Maintenance and location of assets is another significant factor in determining residency status. The more significant the assets physically located outside of Australia, the more persuasive the factor is in determining that you are not an Australian resident for tax purposes.


Social and living arrangements

Personal circumstances and the way in which you interact with society around you also indicates your residency status. This includes:

  • joining or being a member of sporting or community organisations;
  • where your mail is being directed and any residential property leasing commitments.


It is important to note that determining residency requires consideration of all of the above factors on a case by case basis. There is no one factor that will determine the issue without reference to the circumstances as a whole and it is a matter of judgement as to whether or not you have severed your Australian residency status.

Domicile is a common law concept, revised by the Domicile Act 1982 (Cth). Under the domicile test, persons whose domicile is not in Australia are treated as non-residents. This test is of significant relevance to determine when someone is taking up residency outside of Australia.

To establish domicile, you must reside in a country and have the intention of remaining there indefinitely. As such, there are two types of domicile:

Domicile of Origin

Your domicile of origin is acquired at birth. It is the domicile of the person on whom an infant is legally dependant (your father if born legitimately).

Domicile of Choice

Domicile of origin remains as your domicile until a domicile of choice is acquired in another country where you intend to remain indefinitely.

In short, you will be taken to have adopted a new domicile of choice when you can prove an intention to make another country your home.

However, if you are unable to show that you have established a new domicile outside of Australia, to rebut the presumption that you are an ordinary resident of Australia because of your domicile, you must show that you have a permanent place of abode outside of Australia.
You will be deemed an Australian resident for tax purposes if you are present in Australia for more than one-half of the income year, whether continuously or intermittently, unless it is established that:

  • your usual place of abode is outside of Australia; and
  • there is no intention to take up residency here.

It is important to note that the 183-day test is a test of residence for incoming rather than departing taxpayers and is not relevant to someone leaving Australia to reside overseas.

If you are a member of either of the superannuation schemes covered by the Superannuation Act 1990 (Cth) or Superannuation Act 1976 (Cth), you will be considered an Australian tax resident.

However, it is important to note that these superannuation schemes apply to Commonwealth Government employees only.

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