ATO Statement Regarding Non-Residency Status of Australian Expat – The Australian Taxation Office has released a decision impact statement following the full court decision regarding the non-residency status of an Australian expat.
The closely followed case of Harding v Commission of Taxation (2019) FCAFC 29 centered around whether or not the Australian expat was a resident or non-resident for tax purposes given his unique living and working situation.
The main argument put forward by the ATO was that Mr Harding did not have a permanent place of abode due to the temporary nature of his living arrangements, that being a serviced apartment.
The Full Federal Court ruled that a permanent place of abode should be interpreted more widely and when considering the non-residency status of an Australian expat that whether a person is living permanently in a country or state should have more consideration than the permanence of a specific house, flat or dwelling.
The ATO has indicated that it will review the Taxation Ruling IT 2650 to reflect the view of the Full Federal Court with particular attention to the interpretation of “place of abode”.
The ruling has stood for 28 years and the latest statement provides more clarity around the non-residency status of Australian expats given the rapidly changing living and lifestyle arrangement for those living and working overseas.
“In deciding whether the person’s permanent place of abode is outside Australia, the Commissioner will consider the facts and circumstances surrounding the person’s departure from Australia, their arrangements in relation to the overseas country and nature of their presence there” the statement released by the ATO said.
This feedback from the ATO underlines the importance of ensuring that when a Australian decides to move overseas and become an Australian expat that it is imperative that their financial and personal affairs are properly structured and they seek out Australian expat tax and finance advice to ensure that they don’t find themselves in the same position as Mr Harding.