Determining Australian residency status under subsection 6(1) of ITAA 1997

Running head: TAXATION LAW
Taxation Law
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1TAXATION LAW
Table of Contents
Issues:......................................................................................................................................2
Rule:.........................................................................................................................................2
Application:...............................................................................................................................3
Conclusion:..............................................................................................................................4
References:..............................................................................................................................5

2TAXATION LAW
Issues:
Whether the taxpayer would be held as the Australian resident under the
“subsection 6 (1) of the ITAA 1997”?
Rule:
According to the “Taxation Ruling IT 2650” it is related in ascertaining whether an
individual that has their permanent place of dwelling out of Australia will be considered as
the Australian dweller1. As defined under “subsection 6 (1) of the ITAA 1936” an individual
is regarded as the Australian occupant that have their place of dwelling in Australia excel the
taxation commissioner is satisfied that the enduring home of residence is outside Australia.
To ascertain the status of residency under the definition of “subsection 6 (1) of the ITAA
1936” it is vital to apply the relevant test in determining residential status. The test is
resident as per ordinary concepts, domicile test and 183 day’s test.
As per the “Resides Test” the term resides signifies to live permanently for a
considerable time period2. The span of physical existence in Australia together with
maintenance and location of assets is held important in this test. The commissioner in
“Miller v FCT (1946)” stated that residential status of an individual is reliant on the degree
and facts.
The “Domicile Act 1982” explains that it is an important theory in determining the
residential status under the act. The domicile test explains that an individual is an Australian
resident given their place of abode is in Australia given the officer of taxation is satisfied that
a person has the permanent place of residence outside Australia. As held in “Applegate v
FCT (1979)” the court held that the domicile of the taxpayer was in Australia and failed to
meet the requirement of Australian resident since the taxpayer place of residence was
outside Australia3. The decision of high court held that the permanent does not signifies
perpetual since objectivity is evaluated every year.
To determine the domicile of a taxpayer inside the meaning of resident under
“subsection 6(1)” it is necessary to take into the account the purpose of a person’s
1 Woellner, Robin, et al. "Australian Taxation Law 2016." OUP Catalogue (2016).
2 Snape, John, and Jeremy De Souza. Environmental taxation law: policy, contexts and
practice. Routledge, 2016.
3 Robin, H. Australian taxation law 2017. Oxford University Press, 2017.