The Full Federal Court has now handed down its decision in the residency case of Harding v COT  FCAFC 29. (Harding), reversing the Federal Court’s decision at first instance, and finding in favour of Mr Harding.
The Full Federal Court’s decision turned on the meaning of the term “permanent place of abode” in the context of section 6(1) of the Income Tax Assessment Act 1936. The Court found regardless of the nature of Mr Harding’s accommodation (being a ‘temporary’, serviced apartment) it was correct to conclude his place of abode was Bahrain rather then Australia for Bahrain was the “place” where he was living.
As we reported in October 2018 the Board of Taxation (Board) was seeking consultation on key recommendations from its earlier report supporting the reform of the individual tax residency rules. It will be interesting to see whether the Commissioner of Taxation seeks special leave to appeal this decision to the High Court. If the Commissioner applied for, and were successful in seeking special leave, a decision from the High Court (whether in favour of the taxpayer or not), might give further impetus to the reform push.
To discuss this article, the decision in Harding or for any further information regarding the question of establishing residency in Australia for taxation purposes, please contact:
Principal Lawyer | Accredited specialist in Tax Law
M +61 407 821 157 | T +61 3 9611 0176
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia