Determining Residential Status for Taxation Purposes

The assignment provides a detailed analysis of the case study, applying different tax laws and rulings to determine if Dale meets the criteria for being considered an Australian resident for taxation purposes in both 2017 and 2018. It utilizes relevant legal precedents such as 'Miller v FC of T (1946)', 'Levene v IRC (1928)', and 'IRC v Lysaght (1928)' to support its conclusions, ultimately concluding that Dale satisfies the 183 days' rule and complies with tax rulings TR 98/17 for both years.

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1TAXATION LAW
Table of Contents
Issue:.........................................................................................................................................2
Rule:..........................................................................................................................................2
Application:...............................................................................................................................3
Conclusion:...............................................................................................................................5
Reference List:.........................................................................................................................6

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Issue:
The current issue is based on the determination of residential status of Dale for the
taxation purpose during the financial year of 2017. Additionally, the case study is also
surrounded by the issue of determining the residential status for Dale during the financial
year 2018 as well.
Rule:
Domicile Test: The docile test represents an individual is considered to be an Australian
resident under the domicile Act 1982 if the persons have the permanent place of abode in
Australian unless the commissioner is content that the permanent place of abode is out of
Australia1.
183 Days Test: The 183 days test represents that an individual present in Australia for more
than one half of the income year whether constantly or in breaks will be considered as the
Australian resident2. However, an exception to this rule is that unless it is noticed that their
place of abode is outside of Australia and does not have the intention of taking up the
residence in Australia.
The “Taxation ruling of TR 98/17” provides the commissioner with the
interpretation of the ordinary concept of the term resides within “subsection 6 (1) of the
ITAA 1936”3. The ruling is primarily applicable to most of the individuals that enter Australia
such as;
a. Migrants
b. Students that are studying in Australia
c. Visitors that are on holiday
d. Academics teachers or student studying in Australia.
According to the judgements held in “Applegate v FC of T (1979)” events following
the year of income might assist in determining the individual’s residential status. As defined
1 Barkoczy, Stephen, Foundations Of Taxation Law 2014
2 Coleman, Cynthia and Kerrie Sadiq, Principles Of Taxation Law 2013
3 Grange, Janet, Geralyn A Jover-Ledesma and Gary L Maydew, 2014 Principles Of
Business Taxation

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under “subsection 995-1 of the ITAA 1936” an Australian resident represents a person
who is a resident of Australia for taxation purpose4. According to the ordinary concept in an
individual who is a migrant that comes to Australia that intends to reside in Australia on
permanent basis from the arrival.
As held in “Miller v FC of T (1946)” the court of law held that the quality and nature
of behaviour represents the way a person arranges the domestic and economic affairs as
the portion of regular order of their lives5. On noticing the circumstances where the regular
daily behaviour of persons over the time is fairly identical to their behaviour prior to entering
Australia will be considered as an Australian resident. Even though the behaviour of the
person over the time is different from their behaviour prior to entering in Australia, an
individual is most likely to be considered as the Australian resident given the evidences of
their presence reflect a routine of starting their living in Australia.
Citing the reference of “Levene v IRC (1928)” the commissioner have held that a
person’s intention, objective or reason for being in Australia helps in determining whether the
person is residing in Australia6. An established purpose namely employment or education
might support the intention of living in Australia.
The court of law has also referred to “IRC v Lysaght (1928)” to determine on the
social and the living arrangements made the persons entering in Australia to interact with the
surrounding during the course of stay in Australia and might indicate that the individual is
residing Australia7. The arrangement generally comprises of joining community organizations
or making a commitment to residential lease.
Application:
As evident from the case study Dale is holding UK passport and has undertook a
post graduate degree in Australia for three-year period under student visa. Under the
4 Kenny, Paul, Australian Tax 2013 (LexisNexis Butterworths, 2013)
5 Morgan, Annette, Colleen Mortimer and Dale Pinto, A Practical Introduction To Australian
Taxation Law (CCH Australia, 2013)
6 Sadiq, Kerrie et al, Principles Of Taxation Law 2014
7 Woellner, R. H, Australian Taxation Law 2012 (CCH Australia, 2013)

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domicile test Dale cannot be regarded as Australian resident since he does not have a
permanent place of abode in Australia and has a permanent place of abode in UK.
Significantly under the 183 days test Dale has been present in Australia for more
than six months either constantly or in breaks since he arrived Australia from 3rd April 2017.
Therefore, under the 183 days Dale will be considered as the Australian resident since Dale
successfully meet the criteria of 183 days’ test.
Apart from the above stated test the “Taxation ruling of TR 98/17” defines the Dale
to be Australian resident under the ordinary concept. In application with “subsection 6 (1)
of the ITAA 1936”, Dale has travelled to Australia and carried a student visa for studying in
Australia. The quality and the nature of behaviour have represented a way where Dale has
arranged his domestic and economic affairs8. Citing the reference of “Miller v FC of T
(1946)” it can be considered that Dale will be regarded as the Australian resident as his
intention reflects the intention of taking up the Australian residence by renting an apartment
and entered into a one-year lease. This acts as an evidence in reflecting in a routine by Dale
to start living in Australia.
Furthermore, after enrolling in Engineering course he started a part time job in
engineering firm and this reflected Dale’s intention of taking up the Australian residency.
Citing the reference of “Levene v IRC (1928)” the intention of residing in Australia is
established as he undertook employment and leased an apartment to support the intention
of residing in Australia.
Supporting the evidence from “IRC v Lysaght (1928)” the social and living
arrangement undertaken by Dale represents that he is an Australian resident for the financial
year 2017 and has also satisfied the 183 days’ test criteria to be held as an Australian
resident.
Similarly during the financial year of 2018 the six months behaviour for Dale cannot
be confined to one income year. Dale has entered in Australian on 3rd April and has intended
to reside for the remaining part of the year. As long as Dale exhibit the character of residing
in Australia over the entire period he will be considered as the Australian resident.
8 Woellner, R. H et al, Australian Taxation Law 2014

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Conclusion:
On a conclusive note it can be stated that Dale has satisfied the 183 days’ rule and
has complied with the rules of Taxation Rulings TR 98/17. Therefore, dale will be considered
as the Australian resident for the financial year of 2017 and 2018 as well.

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Reference List:
Barkoczy, Stephen, Foundations Of Taxation Law 2014
Coleman, Cynthia and Kerrie Sadiq, Principles Of Taxation Law 2013
Grange, Janet, Geralyn A Jover-Ledesma and Gary L Maydew, 2014 Principles Of Business
Taxation
Kenny, Paul, Australian Tax 2013 (LexisNexis Butterworths, 2013)
Morgan, Annette, Colleen Mortimer and Dale Pinto, A Practical Introduction To Australian
Taxation Law (CCH Australia, 2013)
Sadiq, Kerrie et al, Principles Of Taxation Law 2014
Woellner, R. H, Australian Taxation Law 2012 (CCH Australia, 2013)
Woellner, R. H et al, Australian Taxation Law 2014