Tax residency for individuals – the 183 day and superannuation fund tests

We’re almost there! In the previous posts I’ve introduced the concept and significance of residency, explained the common law meaning of residency and outlined the domicile test. In this final post on the subject, I’ll end with a brief overview of the final two statutory tests – the 183 day test and the superannuation fund test.

183 day test

The 183 day test generally applies to individuals who are usually residents of Australia but during the income year are not living in Australia. It says that a person is a resident of Australia if they are here continuously or intermittently for more than half of the year (183 days) unless the Commissioner is satisfied that their ‘usual place of abode’ is outside Australia and that they do not intend to take up residence in Australia.

A backpacker who came to Australia on a 12 month working holiday Visa and returns home at the end of their trip would not be a resident under this test even though they are in Australia for more than half the year because their usual place of abode (i.e. the place they ordinarily reside) remains their home country.

If you satisfy the 183 day test you are only treated as a resident for the days you are actually present in Australia, not the entire income year (though this isn’t completely settled and others take a different view). Finally, it should be pointed out that if you are in Australia for more than 183 days but these straddle two income years (e.g. from February to November) you would not be in Australia for more than half of either income year and therefore not be a resident.

Superannuation test

This test generally applies to people who are usually residents of Australia but during the income year are not living in Australia. It has a limited application and is mainly designed to catch Australians working in diplomatic missions abroad and their families. It extends residency to eligible employees for the purposes of the Superannuation Act 1976. This is basically somebody who is employed by the Commonwealth government. It is designed to catch Australians living in diplomatic missions abroad. Note that eligible employee includes those on extended unpaid leave.

Cheers,

Simon

All advice in this blog is of a general nature. I’ve done my best to make sure it is accurate but I give no guarantees. Make sure you seek professional advice that is specific to your situation.

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