International tax & business 2014

Dempsey: Don't call Australia home

Source: Taxation In Australia Journal Article

Published Date: 1 Sep 2014


Determining the tax residency of an Australian living overseas requires a detailed factual inquiry. It is accepted that the term “resides” has its ordinary meaning and involves an inquiry as to whether the facts of the case are within that ordinary meaning. For that reason, taxation cases involving questions of residency tend to be decided by the Administrative Appeals Tribunal rather than the Federal Court.

This article examines recent cases on residency decided by the tribunal, including the Dempsey case. The purpose is to determine whether Dempsey is a decision turning on unique facts, or whether it signifies a broader trend in residency cases in the tribunal requiring a change to the Commissioner’s administrative practice. The article argues that the case highlights the danger of the “rules of thumb” typically applied by the ATO and tax practitioners in this area, and the importance of a genuine inquiry into all of the taxpayer’s circumstances.

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International tax & business 2014

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