Taxation Law: Residency Test and Permanent Place of Abode

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

1TAXATION LAW
Table of Contents
Part 1:..................................................................................................................................... 2
A summary of key legal issues:...........................................................................................2
Summary of relevant law:...................................................................................................2
The permanent place of abode test:...................................................................................2
Application of law to the given facts in case:.......................................................................3
Opinion on case’s practical impacts:...................................................................................3
Part 2:..................................................................................................................................... 4
Issues:................................................................................................................................ 4
Laws:.................................................................................................................................. 4
Application:......................................................................................................................... 4
Conclusion:......................................................................................................................... 5
References:............................................................................................................................ 6

2TAXATION LAW
Part 1:
A summary of key legal issues:
The issue raised in the question was whether Mr Harding was considered as non-
resident for the year 2011. This includes whether during that year Mr Harding ceases to be
residing in Australia and whether he had established a permanent place of residence out of
Australia. In “Harding v Commissioner of Taxation (2018)”, the court of law held that a
citizen of Australia that has been living out of Australia for some years and has established
the home overseas, continued to remain an Australian resident for taxation purpose for the
reason that his fully furnished home that was maintained overseas was not sufficiently
permanent1.
Summary of relevant law:
The resides test:
Whether or an individual is living in Australia is considered as the first test for the
purpose of residency. An individual would be treated as resident of Australia for taxation
purpose if an individual is for real living in Australia, irrespective of his nationality, citizenship
or their place of perpetual home. The case laws offer the factors that need to be considered
as the indicative of ascertaining whether an individual is residing in Australia. The court in
“Applegate v FCT (1979)” held that permanent does not signifies forever and the
objectively evaluated every year. This includes the physical presence, duration of physical
presence, frequency and regularity of movements and their purpose of coming to Australia
or for trip to abroad2.
The permanent place of abode test:
An individual’s intention of staying permanently instead of staying temporary or
transitory is considered vital but it is not considered as the only factor to be taken into
account. These factors comprise of the intended as well as the actual length of overseas
stay. It also includes whether any fixed home has been established out of Australia and the
durability of an individual’s continuous connection with the place within Australia. Similarly, in
“Boer v FCT [2012]” and “Sully v FCT [2012]”, the taxpayers were considered as the
1 "INCOME TAX ASSESSMENT ACT 1936", Austlii.Edu.Au (Webpage, 2019)
<http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/>
2 "INCOME TAX ASSESSMENT ACT 1997", Austlii.Edu.Au (Webpage, 2019)
<http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/>