The Domicile Test and ‘Permanent Place of Abode’ Outside Australia

The domicile test treats a person as an Australian resident where their domicile is in Australia unless the Commissioner is satisfied that their permanent place of abode is outside Australia.

Two legal questions must therefore be kept separate: where the person is domiciled, and whether their permanent place of abode is outside Australia. “Permanent” in this context does not mean everlasting or ownership of one house.

Domicile

A domicile of origin is generally acquired at birth and can be displaced by a domicile of choice. Establishing a new domicile of choice requires lawful presence and an intention to make that country the person’s home indefinitely. Evidence of a fixed-term assignment may not be enough.

Immigration rights are relevant to whether the person can form the required intention, but they are not conclusive.

Permanent place of abode

The concept can encompass the person’s enduring overseas living arrangements and not merely the four walls of a single dwelling. A person who moves between homes in one foreign country can still have a permanent place of abode there.

Relevant matters include expected and actual length of stay, continuity of presence, quality of accommodation, family location, abandonment of Australian residence, overseas community and employment ties, and the nature of returns to Australia.

The Australian home

Keeping an Australian property does not necessarily preserve residency, but its availability and use carry weight. A long-term commercial lease can support abandonment; retaining it ready for personal occupation can point the other way.

Ownership is only one factor. A rented Australian home can be retained as part of an Australian life, while an owned property can become a passive investment.

Temporary assignments

A defined employment term does not automatically prevent a permanent overseas abode. The overall duration, renewals, family arrangements, school enrolment and daily life can outweigh the formal label. Equally, open-ended employment will not establish non-residency where the overseas arrangement remains provisional.

Practical takeaway

Analyse domicile and abode separately. Document legal status, intention and objective living arrangements, and avoid reducing the test to property ownership or a minimum number of years.

Official sources and further reading

• Australian Taxation Office: Residency – the domicile test
• Australian Taxation Office: TR 2023/1 – Income tax: residency tests for individuals
• Australian Taxation Office: Your tax residency

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