Returning to Australia Due to Middle East Unrest – What It Means for Your Tax Residency

With the current instability in parts of the Middle East, we are seeing an increasing number of Australian expatriates temporarily returning to Australia for safety and family reasons. A common question we are being asked is:

“Will returning to Australia make me an Australian tax resident again?”

The answer is not always straightforward, and importantly, it is not always a bad outcome.

There is no special ATO guidance (yet)

Unlike during COVID-19, the Australian Taxation Office (“ATO”) has not issued any specific concessions or guidance for individuals returning to Australia due to geopolitical unrest.

This means the existing rules determine your tax residency position based on your personal facts and circumstances.

Residency is driven by your behaviour, not just your location

Simply being physically present in Australia does not automatically make you a tax resident again.

Instead, the ATO looks at a range of factors, including:

Your intention (is your stay temporary or open-ended?)
Your living arrangements (have you re-established a home in Australia?)
Your ties to Australia vs overseas
Whether you have maintained your overseas base

For many expats, the key question becomes: Have you really “moved back”, or are you just temporarily in Australia?

Why maintaining your overseas position matters

For those wanting to remain non-resident, one of the most important factors is maintaining a permanent place of abode outside Australia.

In practical terms, this often means:

Retaining your overseas home (e.g. UAE lease or property)
Maintaining your visa or residency status
Keeping your broader financial and personal ties offshore

If you unwind your overseas living arrangements, it becomes significantly more difficult to argue that you remain a non-resident.

But remaining non-resident is not always the goal

While many individuals initially assume they should try to remain non-resident, this is not always the optimal outcome.

Depending on your circumstances, becoming an Australian tax resident again may:

Simplify your tax affairs
Provide access to concessions (e.g. main residence rules)
Align better with your medium-term plans

This is particularly relevant where your return to Australia may extend beyond a short-term stay.

Time in Australia still matters

Spending more than 183 days in Australia in an income year can increase the likelihood of being treated as a tax resident. However, this is not a strict rule, your broader circumstances still need to be considered and as we have seen in recent cases, a stay of much shorter timeframe can still trigger residency under either the domicile or resides tests.

That said, longer stays generally increase residency risk, particularly where combined with other factors such as family relocation or Australian employment.

Residency for Spouses and families – not always the same answer

A common misconception is that both spouses will automatically have the same tax residency outcome. In reality, tax residency is determined separately for each individual.

This means it is possible for one spouse to be treated as an Australian resident while the other remains non-resident, depending on their respective circumstances.

What if you have only recently moved overseas?

A key consideration for many individuals is whether they have been living overseas long enough to have clearly established a permanent place of abode outside Australia under the domicile test.

While there is no strict “2-year rule” in the legislation, in practice the ATO often expects to see a sufficient period of settled living overseas before accepting that an individual has genuinely established their life outside Australia. Where an individual returns to Australia relatively soon after departing (for example, within the first 12–24 months), this can create additional risk that the ATO may take the view that their overseas move was not sufficiently permanent. In these cases, a temporary return to Australia may not only impact your current residency position, but could also call into question your historical non-resident status.

This does not mean that non-residency cannot be supported, but it does mean that the quality of evidence becomes more important. Factors such as the nature of your overseas accommodation, employment arrangements, intention at the time of departure, and steps taken to establish yourself offshore will all be critical in supporting your position.

Final Thoughts on Returning to Australia

We recommend speaking with us if any of the following apply:

You have returned (or are planning to return) to Australia due to the current situation
You are unsure whether your stay will be short-term or extended
You are considering giving up your overseas home or visa
Your family is relocating to Australia (e.g. schooling, housing)
You are taking up work while in Australia
You have significant assets, investments, or structures in place

Early advice is key, small decisions made now can have significant tax implications later.

Contact Us

If managing your financial affairs across borders is starting to feel overwhelming, you’re definitely not alone. It’s a complex space, and having the right support can make all the difference. At Atlas Wealth Group, we specialise in supporting Australian expats with cross-border tax planning, superannuation, mortgages and wealth management. Contact us to arrange a consultation with a qualified adviser who specialises in Australian expat financial planning to get personalised guidance tailored to your circumstances.

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Disclaimer: This article is intended for informational purposes only and does not constitute legal or financial advice. Individuals should consult licensed professionals when seeking guidance regarding their financial circumstances.