The AAT has set aside the Commissioner’s decision and held that a taxpayer was an Australian resident for part of the 2012 income year and therefore was entitled to the pro-rated tax-free threshold.

The taxpayer was a French citizen who arrived in Australian on a temporary working holiday visa. At all relevant times he intended to return to France and the AAT noted that there was no evidence to suggest that he had established a domicile of choice in Australia. Whilst in Australia, the taxpayer undertook various casual work and lived in 3 different residences. For the relevant year, the taxpayer spent a total of 128 days travelling around Australia before departing for France on 28 November 2011.

Before leaving, the taxpayer lodged his 2012 income tax return reporting an income of $5,222 and declaring himself to be a resident. The Commissioner subsequently issued a Notice of Assessment indicating that the taxpayer owed $497.35 in tax on the basis that he was a non-resident for the relevant year. The taxpayer’s objection was then disallowed by the Commissioner.

The Tribunal noted the taxpayer arrived in Australia in December 2010 and the Commissioner accepted that he was a resident for the 2011 income year. It said the taxpayer’s factual circumstances had not changed between the 2011 and the 2012 year, and yet the Commissioner reached differing conclusions on residency for the 2 years.

The AAT held that the taxpayer was a resident for the 2012 income year under s 6(1) of the ITAA 1936 until he departed for France on the basis that he lived in regular places in Sydney, undertook work commitments and rented accommodation which indicated that he had a settled place. Therefore, it held the taxpayer was entitled to a pro-rated tax-free threshold for the relevant year.

(AAT Case [2013] AATA 875, Re Guissouma and FCT, AAT, Ref No 2012/4814, Lazanas SM, 9 December 2013.)

[LTN 238, 10/12/13]


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