BLAW30002 Chap.3 Residence, Source and Jurisdiction
Residence, Source and Jurisdiction
Residence determines the starting jurisdictional rule. An Australian resident is generally assessed on worldwide income, while a foreign resident is generally assessed on Australian-source income. Individual residence is tested annually through four alternative gateways: ordinary residence, domicile, the 183-day test and the government superannuation test.
No single factual connection controls the ordinary residence inquiry, and the day-count test contains a two-part exception. Company residence has separate incorporation, management and control, and voting-control gateways. Source then depends on the income-producing activity or asset, with different connecting factors for services, land, interest, dividends and royalties.
What this chapter covers
- 01
Resident worldwide-income rule
- 02
Foreign-resident Australian-source rule
- 03
Ordinary residence factual factors
- 04
Domicile and permanent place of abode
- 05
The 183-day test and statutory exception
- 06
Government superannuation test
- 07
Company residence gateways
- 08
Source by income type and double-tax conflicts
Worked example · free
A long stay with an overseas home
- 1Under ordinary residence, weigh physical presence against purpose, temporary accommodation, family location and the continuing overseas home.
- 1Apply the domicile test separately by identifying Sofia's domicile and the character of any permanent place of abode overseas.
- 1The 205-day presence meets the 183-day threshold, but test both exception limbs: usual abode overseas and no intention to reside here.
- 1Reach a supported annual or part-year conclusion, then state whether worldwide income or Australian-source income enters the basic model.
Key terms
- Ordinary residence
- Residence according to ordinary concepts, determined from the taxpayer's overall factual connection and mode of life.
- Domicile test
- An individual residence test based on Australian domicile and the absence of a permanent place of abode outside Australia.
- 183-day test
- A day-count residence gateway subject to an exception involving usual abode overseas and no intention to reside in Australia.
- Part-year resident
- A person whose residence status changes during the income year, requiring the relevant consequences to be allocated by period.
- Company residence
- Residence established through incorporation or specified combinations of Australian business activity and control.
- Income source
- The practical geographical connection of the activity, asset or arrangement that produces a particular category of income.
Residence, Source and Jurisdiction FAQ
Is tax residence the same as immigration status?
No. Migration status can be relevant evidence but does not determine tax residence. The statutory tests focus on factual residence, domicile, days and specified superannuation status, applied for the relevant income year.
Does spending 183 days in Australia automatically make someone resident?
No. Meeting the threshold activates the test, but the statutory exception asks whether the person's usual place of abode is overseas and whether they lack an intention to take up residence in Australia. Both limbs require facts.
How many individual residence tests must be satisfied?
Any one of the four alternative tests can establish residence. Apply them separately because an individual who fails ordinary residence may still satisfy domicile, 183-day or government superannuation treatment.
How is a company's residence tested?
Australian incorporation is one gateway. The materials also identify carrying on business in Australia combined with central management and control here, or combined with Australian-resident voting control. Apply the relevant statutory wording to facts.
When does source matter?
In the basic jurisdiction model, source is decisive for a foreign resident because Australian-source income can be assessed here. A resident is generally assessed on worldwide income, subject to specific rules and relief.
What determines the source of service income?
The place where services are performed ordinarily carries the greatest weight. Where performance is location-neutral, contract formation, payment and the wider income-producing activity may need closer analysis.
How should competing residence indicators be weighed?
Organise the facts by the statutory test they address instead of adding them as if each fact carried one vote. A long physical stay may support ordinary residence, while temporary accommodation, an overseas family home and a fixed project purpose may point the other way. Apply domicile and the day-count gateway independently, including every exception limb.
After reaching a status for the relevant period, state its consequence for worldwide or Australian-source income rather than ending with the label resident or foreign resident.
Exam move
Redraw the four individual tests as parallel gateways feeding one residence conclusion. Under ordinary residence, group facts by presence, purpose, behaviour, family and employment ties, assets, and living arrangements. Under domicile, separate the domicile question from the permanent-place-of-abode question. Under the 183-day test, write the threshold and both exception limbs every time.
Add the company gateways on a separate card so individual and company tests never merge. Then build a source table by income type: services, land, trading activity, interest, dividends and royalties. Practise conclusions that state both status and consequence. For example, do not stop at foreign resident; add which Australian-source amount remains assessable.
When facts point both ways, argue each pattern and explain which connections best describe the taxpayer's actual mode of life.
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