| Non-resident for Tax Purposes |
| In a recent Administrative Appeals Tribunal (AAT) decision, a teacher who took three years leave from her Australian employment to accompany her husband to Fiji, was held to be a non-resident of Australia for tax purposes. |
Whilst overseas, the taxpayer received accrued long service leave payments, maintained an Australian bank account and returned to Australia on several occasions for holidays. The taxpayer? home was sold and the family?s furniture and effects were put into storage.
The Tribunal found that the taxpayer had made a home overseas and was not an Australian resident despite her intention to return to Australia in due course.
When departing Australia for an extended period of time, you may be treated as a non-resident for tax purposes. This may result in your foreign income being non-taxable in Australia, but any Australian income you derive during that period would be taxed at higher (non-resident) rates. Significant capital gains tax issues may also arise.
It has become increasingly difficult to predict how a certain set of circumstances would be viewed by the courts, so never presume! This case certainly surprised many commentators. It seems now that the location of the family home is more influential, in the view of the court.
20th-July-2003 |
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