AUSTRALIA Law and Practice Contributed by: William Moore, Frank Hinoporos, Emma Woolley and Todd Bromwich, Hall & Wilcox
that their permanent place of abode is outside Aus - tralia. Domicile is generally based on the place of birth or ancestry, while permanent place of abode is assessed by examining actual living arrange - ments. • Physical presence in Australia: an individual is a resident if they are physically present in Australia for more than half the income year (183 days), unless it is established that their usual place of abode is outside Australia and they do not intend to reside in Australia. • Public Sector Superannuation: the individual is a member, or spouse or child of a member, of the Public Sector Superannuation Scheme or the Commonwealth Superannuation Scheme. Australian citizenship does not automatically con - fer tax residency; rather, residency depends largely on the individual’s circumstances and intentions. In 2021, the federal government announced proposed changes to Australia’s individual tax residency rules. The proposed new rules, which are not yet enacted, would introduce a “bright line” test, under which indi - vidual residency can be determined with reference to prescribed and objective factors. For trusts, residency is generally established if the trustee is an Australian resident or if the central man - agement and control of the trust is in Australia. For companies, residency is determined if the company is incorporated in Australia, or if it carries on business in Australia and has its central management and control in Australia, or if voting power is held by Australian residents. These residency rules are important as they determine whether the worldwide income of the individual, trust or company is subject to Australian income tax. Tax Implications of Commencing and Ceasing Australian Residency As discussed in 1.4 Pre-Immigration and Exit Plan- ning , when an individual, company or trust becomes an Australian tax resident, certain assets may have their cost base reset to market value for CGT pur - poses. This means that only gains or losses arising after the start of residency are subject to Australian
tax, subject to specific rules applying (such as for TAP assets or pre-CGT assets). Conversely, ceasing Australian tax residency can trig - ger a deemed disposal of assets, resulting in a CGT event. The application of these rules differs, depend - ing on the type of entity that owns the asset. 7.2 Expeditious Citizenship There are no expeditious means for obtaining Aus - tralian citizenship. The most common pathways to Australian citizenship are by descent or by confer - ral. Citizenship by conferral is the standard route for most applicants and requires an individual to be a permanent resident and meet specific eligibility cri - teria before applying. Citizenship by descent may be available if an individual was born outside Australia and at least one of their parents was an Australian citizen at the time of said individual’s birth. According to the Department of Home Affairs, the lat - est processing times are as follows: • for Australian citizenship by conferral, 90% of applications are processed within six months; • for Australian citizenship by descent, 90% of appli - cations are processed within five months; and • for Evidence of Australian citizenship, 90% of applications are processed within 12 days. 8. Planning for Minors, Adults with Disabilities and Elders 8.1 Special Planning Mechanisms A number of planning options are available, depend - ing on the level of disability and the care and assis - tance required. For beneficiaries who are in receipt of means-tested government support (such as a disability support pension), consideration should be given to a Special Disability Trust (SDT). An SDT is established for the primary purpose of funding the care and accommoda - tion needs of the principal beneficiary; this can include medical and dental expenses, private health fund memberships and property maintenance. There is also a discretionary spending amount of AUD15,250 as of
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