Maintaining an Oz tax residency while living overseas for 10-20 years or forever

We all know that the ATO wants us Aussie citizens to remain tax residence in Oz for as long as possible and make it as difficult as possible for someone to become a tax non-resident, even if they live/work overseas so they can keep collecting tax dollars for themselves. The ATO has different "tests" they do to see if they can somehow catch you on one point to keep you as a tax resident.

My question is, is it possible to remain an Oz tax resident for 10 years, 20 years or even forever while actually living overseas between 9-11 months of every year? Eg. by maintaining a place in Oz as your home by living with mum & dad by leaving all your possessions in their house (say you never rented or owned your own home), remaining on the electoral role, having bank accounts in Oz, flying back to Oz once a year to visit mum/dad for a month, having an Oz postal address (even if it's a PO Box), etc.

I'm also thinking about if a person owned a PPOR like in the below thread. They could benefit if they didn't become a tax non-resident by doing the above: Capital Gains Tax exemption for Primary Residence - non-residents changes

 

Yes I think so

 

Their is world wide competition for countries to have tax residents so they can all collect higher portions of tax revenue. The tax residency rules between countries are typically covered with Double Tax Agreements that have further tests and tie breaker rules.

 

This topic interests me as in some cases it is very beneficial to remain a tax resident whilst living abroad.

I believe being able to satisfy the domocile test, maintaining active Oz bank account & perhaps keeping a registered vehicle would be enough? Any thoughts / experiences?

 

The expected duration of the arrangements could be seen as a change of residency for tax purposes from the time the arrangement commences. The nature of how you enter and depart the other country would be an important consideration. And where you lived in the other country eg with a GF...Then you may have established permanent ties etc. A key fact will be how you enter the other country. The issue of postal addresses, bank accounts etc is irrelevant for tax purposes. Of greater importance is where you are domiciled and establish your "home".

Its an example of a position where the taxpayer should obtain a private ruling to ensure they dont get it wrong either way. And one of the greatest problem most taxpayers ignore is that tax residency is less a choice that a factual position. You dont "become a tax resident" by choice as such and so you cant act to prevent it either in most instances. If you need to consider how not to trigger a change of residency you probably already have concerns you may not be a tax resident.

And why the issue of residency is becoming subject to proposed new laws so that greater statutory tests apply v's the present common law based uncertainty for some persons.

The recent decision in Harding v FCT is a indication of the cost (it reached the Federal Court and took 7 years to resolve) for someone to argue against being a tax resident when they failed to establish a permanent place of abode in the middle east where they worked + lived in oilfields accommodation. So for example living with a GF in Croatia in her property or one she rents for example could act to sever any claim for AU tax residency. The taxpayer in Harding believed he ended his residency when he departed not intending to return. Court disgreed.

 

My advice and experience is to go see an accountant with experience in this area. Reciprocal tax agreements does not guarantee that you wont be double taxed. Also, now with tax treaties between Australia and 40 other countries there will be greater scrutiny of people with multiple tax residencies or domiciles. I used PWC for their global tax expertise rather than my usual local Accountant.

https://www.pwc.com.au/tax/taxtalk/...a-non-resident-just-became-harder-20jun18.pdf

 

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