Hi everyone, This is our first posting on any forum so please point us in the right direction.
We are having difficulty understanding the ATO site regarding our situation.
We have permanent residency visas and we have bought a property in Australia. We have a business in the UK where we spend at least 183 days per tax year. If we sell our house in the UK and switch to renting could this affect our tax residency status in Australia
which is currently non tax residence?.
If we have missed previous threads on this subject we apologise.

Are you sure you are not tax resident in Australia? If you spend a substantial part of the year living in Australia as the holder of a permanent residency visa AND own a property in Australia in which you spend a substantial period each year you may be resident in Australia irrespective of the fact you spend less than 183 days in Australia. The 183 day rule is only one of the tests of residency.

Have a look at the details at this page from the ATO website:
http://www.ato.gov.au/individuals/content.asp?doc=/cont...mfp=001/002&st=&cy=1

What makes you think you are not tax resident in Australia?

Best regards.

Thankyou Alan for your prompt reply. We were concerned that we might trigger a dual tax residency situation hence our original question. Thankyou for the link on the ATO site which we did look at a couple of years ago but we concluded then that our conditions would still indicate non Australian tax residency. We liked the statement at No.46 'no single factor determines residency and many factors are interrelated'.
We used to stay with our adult son in Australia when we visited for holidays but as we extended our holidays to several months it seemed sensible to get permanent visas and buy a property there. Our parents, brothers, sisters and daughter all live in the UK along with most of our friends. We have never worked in Australia but we have to work for at least 6 months of the year in the UK. We were thinking of downsizing in the UK, but wondered if we were to rent instead, would it have any bearing on our tax residency.The residency ruling seems to be the key issue and although we are UK residents for tax it would not be difficult to classify lots of people as overseas tax residents as well. We would be grateful for yours or anyone elses comments.

Think you guys are ok as 183 day rule is probably the most important factor for tax residency see ATO site & search TR98/17 look at no.62.
I bet if you check all the forums you'll find this question has already been answered.There's always a 'Tax expert' looking in or if not someone else in your boat.Be careful to make sure you stay in the UK for 183 days or more.

Thankyou travelertoaus we have just used the search tool on this site and gone back to November 2003 where Alan answers a question re tax residency. Unfortunately there does not seem to be any specific answers re the retaining of a property in the UK but perhaps this appears in another section. I will have a search around unless someone else knows the answer?

In respect of the 183 day rule you need to be very careful with timing especially since the UK and Oz have different tax years. The 183 day rule is cumulative taking in all periods that you reside in one country or the other. It is quite possible to meet the 183 day rule in one country but to blow it in the other due to bad timing.

Having said that you should also take a look at the double tax treaty between UK and Oz as most treaties have a "tie breaker" which decides who gets to claim you as resident if your time is split.

You state that you have permanent residence visas but not how these were obtained as that could be a factor in considering residence.

I don't think you can necessarily rely on the 183 day rule as the ATO can and will look at your behavior over an extended period. The fact that you have a house in Oz is only one factor. They will look to see if you maintain an Oz bank account have any other assets in Oz such as a car, motorbike, boat etc.which would indicate that you have set up home in Oz. The fact that your son resides in Oz does not help your case.
I am also of the opinion that not having a permanent residence in the UK would work against you with the ATO.

I strongly urge you to read in detail the tax ruling dealing with residing which can be found at: -

http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR9817/NAT/ATO/00001#P29

Thankyou Paddy your comments were most helpful.
We have gone back through all of our dates to make sure the 183 day rule would still apply and that looks ok.
We have then spent several hours on the ATO site reading up on residency, tax residency, dual tax residence and all associated subjects. We have then gone through all of those again on the popular forums.
We both have headaches and more to think about than we had realised.
We would add that we both consider ourselves very fortunate to be resident even if not tax resident of both of these countries.