Tax Residency and Taxation of Income: A Case Analysis of Mr. Tom

TAXATION LAW
1. ISSUE
Mr. Tom is concerned about his tax residency for 2016-17 and 2017-18. Further, he
wishes to know how and where his income shall be taxed.
2. Case Laws and Rulings
In terms of Section 6(1)1 of Australian Income Tax Assessment Act, 1936 the term
resident and resident of Australia has been defined. The term shall mean:
A person shall be defined as resident of Australia if any of the situation defined here-in-
below:
(a) Person2 whose domicile is in Australia, unless the commission is satisfied that
personal abode is outside Australia;
(b) Person who has stayed in Australia for more than half a year, unless the tax authority
is satisfied that the usual place of abode is outside Australia and that the concerned
person does not intend to take up residence in Australia;
(c) Person who is an eligible employee under the Superannuation Act, 1976.
Thus in short, Act defined four test for the purpose of determination of tax residency of
an individual;
 Residence under ordinary 3concepts;
 Permanent place of abode and domicile test;
 Test of 183 days;
 Commonwealth superannuation fund test
These tests have been detailed here-in-below:
(a) Residence under Ordinary Concept shall mean a person who dwells permanently or
for a considerable period of time or it shall mean living in a particular place;
(b) Domicile is a legal concept under Domicile Act, 1982. Further, the law states that a
person acquires a domicile on birth. Further, the said domicile shall continue to exist
unless an individual gives up the same by taking domicile of other country.
Reference in this regard may be had to following judgement:-
Henderson v. Henderson [1965] 1 All E.R.179; Udny v. Udny [1869] L.R.1 Sc.&
Div. 441;
1 http://www5.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s6.html
2 https://www.ato.gov.au/law/view/document?Docid=ITR/IT2650/NAT/ATO/00001
3 https://www.ato.gov.au/law/view/document?Docid=ITR/IT2650/NAT/ATO/00001