Taxation Law: Residential Status of Dale

The assignment discusses the residential status of an individual named Dale who arrived in Australia on a student visa. It applies various tests and rulings, including the Domicile Test, 183 days' test, and taxation ruling TR 98/17, to determine whether Dale is considered an Australian resident for tax purposes in 2017 and 2018. The assignment concludes that Dale meets the criteria of both tests and will be held as an Australian resident for financial year 2017 and 2018.

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

TAXATION LAW1
Table of Contents
Issue:..................................................................................................................................... 2
Laws:...................................................................................................................................... 2
Application:............................................................................................................................. 3
Conclusion:............................................................................................................................ 5
Reference List:....................................................................................................................... 6

TAXATION LAW2
Issue:
The purpose of the current issue is to determine whether Dale will be considered as
the Australian resident during the year 2017 and 2018 respectively. The issue revolves
around determining the intention of Dale whether he chose to be an Australian resident.
Laws:
Domicile Test: Domicile is regarded as the legal conception to be ascertained under the
Domicile Act 1982 and to the common rules that is developed by courts in the field of private
international law1. In determining an individual’s domicile for the purpose of definition
Resident under “subsection 6 (1)”, it is vital to consider the intention of the person as to
which country a person makes his or her home indefinitely. As held in “Henderson v
Henderson (1695)” an individual retains the domicile of their origin country and unless an
individual acquires domicile in another nation by operation of law.
183 days Test: If an individual is in point of fact present in Australia for more than six
months or one half of the income year either constantly or with breaks will be considered to
have constructive resident in Australia2. An exceptional to this rule is unless it is noticed that
an individual usual place of residence is out of Australia with no purpose of taking up the
dwelling in Australia.
The “taxation ruling of TR 98/17” provides the commissioner of taxation with the
interpretation of the ordinary meaning of the term resides within the definition of resident
under “subsection (6) 1 of the ITAA 1997”3. The ruling is implemented on a large number
of individuals that enters to Australia as the
a. migrant
b. academics teachers for the purpose of teaching or studying in Australia
c. students that enters to Australia for studying
d. visitors that are on holiday
e. workers with the pre-arranged employment contracts.
1 Woellner, Robin, et al. "Australian Taxation Law 2016." OUP Catalogue (2016).
2 Cao, Liangyue, et al. "Understanding the economy-wide efficiency and incidence of major
Australian taxes." Canberra: Treasury working paper 2001 (2015).
3 Barkoczy, Stephen. "Foundations of taxation law 2016." OUP Catalogue (2016).

TAXATION LAW3
Residency status is regarded as the question of fact and central reasons which
determines the liability of the individual to Australian income tax. The tax liability is
determined based on year by year basis. The federal court in “Applegate v Federal
Commissioner of Taxation (1979)” states that events following the year of income help in
determining the residency of individual.
Australia resident under “section 995-1 of the Act” defines an individual as the person
who is regarded as Australian resident for taxation purpose4. The ordinary concept of
resident is considered wide enough to encompass an individual that arrives in Australia on
permanent basis or a person who is dwelling for a considerable time period.
The span of physical presence or length of time in Australia is regarded decisive in
ascertaining whether the person resides in Australia. The behaviour of the person was
explained in “Federal Commissioner of Taxation v Miller (1946)” where the extent of
continuity, routine or habit that are consistent with residing in Australia.
The court citing the reference of “Reid v The commissioner of Inland Revenue
(1926)” explained that social and living arrangement illustrates a manner that an individual
interact with their social surroundings during their stay or presence in Australia and might
reflect that they are residing. These arrangements might include joining sporting or
community or committing to residential lease.
Application:
As evident from the current situation of Dale it is noticed that he arrived in Australia
with UK passport to undertake a post graduate degree in Australia with a student visa. Under
the Domicile Test Dale retains the of his origin and has his permanent place of abode
outside Australia in UK. Referring to “Henderson v Henderson (1695)” Dale cannot be
considered as the Australian resident under Domicile Test5.
Dale has first arrived in Australia during 3rd April and had been present in Australia
for more than one half of the income year either constantly or in breaks. As a result of this
Dale is said to have a constructive residence in Australia and would be liable for taxation
purpose for the financial year of 2017.
4 Braithwaite, Valerie, ed. Taxing democracy: Understanding tax avoidance and evasion.
Routledge, 2017.
5 Davis, Angela K., et al. "Do socially responsible firms pay more taxes?." The accounting
review 91.1 (2015): 47-68.

TAXATION LAW4
Apart from the above test the “Taxation ruling of TR 98/17” is applied to understand
the residential status and tax liability for Dale. With respect to ITAA 1936 Dale has moved to
Australia carrying student visa but the purpose and nature of behaviour stated a manner
where Dale has stable domestic and economic activities. Citing the reference of “Federal
Commissioner of Taxation v Miller (1946)” the day to day behaviour of Dale considered
over the time reflects a routine of residing in Australia as he has committed to lease
agreement for a period of one year6.
Dale took an employment which represented a behaviour that are in agreement with
the continuity or habit which supported the intention of residing in Australia. Referring to
“Reid v The commissioner of Inland Revenue (1926)” social and living arrangements
represents a manner in which an individual interact with the surrounding during the stay may
reflect that indicate that Dale is an Australian resident for taxation purpose7.
In support of the evidences obtained from the discussion it can be stated that Dale has met
the criteria of 183 days’ test. Additionally, Dale has also met the criteria of taxation ruling of
TR 98/17 hence he an Australian resident for taxation purpose in 2017.
The “taxation ruling of 98/17” defines that no single factor is decisive in
determining the taxation status of an individual8. Dale has arrived in Australia on 3rd April and
has expressed his interest of residing in Australia for the later portion of the year as well.
Therefore, for the financial year of 2017, Dale has illustrated the stated the characteristics of
residing for the entire period and would be held as Australian resident for financial year of
2018 as well.
Conclusion:
Conclusively, findings from the study reflect that Dale has satisfied the 183 days’ test
criteria and has met the criteria of applicable ruling of TR 98/17. Therefore, Dale will be
considered as Australian resident for financial year of 2017 and 2018.
6 ROBIN, H. AUSTRALIAN TAXATION LAW 2017. OXFORD University Press, 2017.
7 Saad, Natrah. "Tax knowledge, tax complexity and tax compliance: Taxpayers’
view." Procedia-Social and Behavioral Sciences 109 (2014): 1069-1075.
8 Miller, Angharad, and Lynne Oats. Principles of international taxation. Bloomsbury
Publishing, 2016.

TAXATION LAW5
Reference List:
Barkoczy, Stephen. "Foundations of taxation law 2016." OUP Catalogue (2016).
Braithwaite, Valerie, ed. Taxing democracy: Understanding tax avoidance and evasion.
Routledge, 2017.
Cao, Liangyue, et al. "Understanding the economy-wide efficiency and incidence of major
Australian taxes." Canberra: Treasury working paper 2001 (2015).
Davis, Angela K., et al. "Do socially responsible firms pay more taxes?." The accounting
review 91.1 (2015): 47-68.
Miller, Angharad, and Lynne Oats. Principles of international taxation. Bloomsbury
Publishing, 2016.
ROBIN, H. AUSTRALIAN TAXATION LAW 2017. OXFORD University Press, 2017.
Saad, Natrah. "Tax knowledge, tax complexity and tax compliance: Taxpayers’
view." Procedia-Social and Behavioral Sciences 109 (2014): 1069-1075.
Woellner, Robin, et al. "Australian Taxation Law 2016." OUP Catalogue (2016).