183-Day Test

People often confuse the application of the 183 day test in reverse – they think that if they go overseas for 183 days they will cease to be resident of Australia for tax purposes. This is NOT the case. If you are going overseas for an extended period, you need to review the Resides Test and the Domicile Test mentioned above.

The 183 day rules says that if you are actually present in Australia for more than half of the income year (i.e. the financial year from 1 July X1 to 30 June X2) you may be said to have a ‘constructive residence’ in Australia, unless it can be established that your usual place of abode is outside Australia and you have no intention of taking up residence here.

In other words, if a person who resides overseas and decides they want to move to Australia, they could be deemed resident of Australia if are physically present in Australia for more than 183 days in a given tax year. If it were not their intention to become resident of Australia, they would need to be able to establish that their actual residence is overseas and that they have no intention of settling permanently in Australia.

For more details on the 183 day rule, go to this link.