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The AAT has held that Mr Dennis Murray was not an Australian resident in any of the 2009, 2010 and 2011 income years.

The facts were described by the AAT as follows.

Mr Murray was born in 1951. He left school at the age of 15 and worked as a builder's labourer and bricklayer until about 15 years ago when ongoing back problems forced him out of employment of that nature. Since then, he said, he had been receiving social security benefits with short periods of part-time work. In 2005 he was sentenced to a term of imprisonment for drug offences. As a consequence of that offending proceedings were taken against him for the confiscation of his assets under the Criminal Property Forfeiture Act 2002 (NT). He said that on his release from gaol in June 2006 he had no assets. Within a short time after his release he was the subject of further attention by police. He said that he decided that he had no future in Australia; he was then in his mid-50s, unable to work and had no assets. His then wife was of Thai descent so he left Australia in 2006 to live with her and other members of her family in Thailand. He subsequently moved to Bali.

Between 2008 and 2010, Mr Murray visited Australia a number of times. In each of the three years in question, Mr Murray was in Australia, in total, for more than one-half of the year of income. Mr Murray said that on each of these occasions he stayed with friends in Darwin. He next came to Australia, on this occasion accompanied by his then partner, Ketut, on 10 February 2010. The couple were planning to stay only nine days and had tickets to return on 19 February 2010. On 11 February 2010 Mr Murray was arrested and charged with the possession of a precursor to a dangerous drug. He was released on bail and required, as a condition of that bail, to surrender his passport. Ketut was detained initially but released without charge. She returned to Bali on her release. In June 2010 Mr Murray was convicted and sentenced to 18 months imprisonment. He was released from gaol in mid-December 2011. Shortly after his release the Deputy Commissioner, on behalf of the Commissioner, served a Departure Prohibition Order on him. That order remains in place and has prevented his return to Bali.

Mr Murray's affairs were the subject of an audit in 2011 whilst he was in gaol. The Commissioner came into possession of documents that showed that in the 2009 income year Mr Murray had paid the equivalent of $191,699 towards the cost of building a boat in Indonesia. The Commissioner concluded that Mr Murray had been a resident of Australia during that year, and the subsequent years, and that the sum of $191,699 represented income in Mr Murray's hands. For the 2010 income year the Commissioner had access to bank documents that showed that Mr Murray was receiving regular payments of interest. The Commissioner calculated the amount of principal that was required to earn the interest shown, and treated that sum, $450,000, as unexplained income. Additionally an amount of $297,903 shown in another bank was treated as an earned income in the 2010 year along with $17,439 in interest receipts. In the 2011 income year the Commissioner determined the amount of interest actually earned to January 2011 and estimated the amount that would have been earned thereafter. As a result, the Commissioner made default assessments pursuant to s 167 of ITAA 1936 of Mr Murray's taxable income.

The AAT held that Mr Murray was not a resident of Australia according to ordinary concepts, and that in the relevant years his permanent place of abode was outside Australia. The AAT said at paras 24-25:

"The strongest evidence that tells against the conclusion that Mr Murray was not residing in Australia is the number and length of his visits to Australia, particularly in the 2009 year. Mr Murray was unable to give any precise explanation of the purpose for any particular visit and cannot now say what he did on any particular trip. He explains the several visits on two bases: visiting, and caring for, his sick brother (and the brother’s equally unwell spouse) and buying equipment for his proposed fishing charter business in Bali. The visits were undertaken well after the time when I am satisfied that Mr Murray had determined to cease living in Australia and to make his home in Bali. The case is one where, from early 2008, Mr Murray had established a residence in Bali. It was where he was residing, with the appropriate resident visa. From that time, Bali was his home and he regarded it as such. It was the place where he intended to return after his visits to this country. His visits to Australia, even though lengthy, did not destroy the continuity of association he had with Bali – it remained where he had his only fixed place of abode, his partner and his assets. He had none of them in Australia. For that reason this is not a case where Mr Murray could be regarded as being a resident of Australia as well as Bali. He had no regular place of abode in Australia, he was dependent upon the hospitality of friends for somewhere to stay. He also relied on one friend to maintain a postal address for him. His connections in Australia were, at best, tenuous.

I am then satisfied that in the 2009 income year Mr Murray did not reside in Australia according to ordinary concepts. That conclusion may be reached more readily in the following year where the pattern of Mr Murray’s visits to Australia had altered significantly. After returning to Bali in early August 2009 Mr Murray returned only for very brief visits until his arrest and subsequent gaoling. The Commissioner accepted, in a brief submission lodged following the hearing, that Mr Murray’s detention in Australia following his arrest, did not, of itself, warrant a conclusion that he was then residing in Australia. His submission was that Mr Murray’s prior status as a resident of Australia continued during the period of his detention in Australia. As I accept that Mr Murray was not residing in Australia according to ordinary concepts prior to his detention I accept that his detention does not alter that position."

Murray and FCT [2013] AATA 780 (AAT, Hack SC PP, 1 November 2013).

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