The AAT has held a taxpayer was not an Australian resident for tax purposes during the 2009 to 2011 income years.
The Tribunal said there was little dispute about the underlying facts in the proceedings. In June 2006, after release from gaol for drug offences and having no assets, the taxpayer decided he had no future in Australia and moved to Thailand to live with his then wife. In 2008, after that marriage had broken down, the taxpayer moved to Bali and commenced a relationship with a new person (now his wife). In early 2009, the taxpayer acquired a sub-lease of the property he was renting. The taxpayer had also obtained the right to reside in Indonesia as a retired person.
Between 2008 and 2010, the taxpayer had made a number of trips back to Australia. During his last visit in February 2010, he was arrested and charged with possession of a precursor to a dangerous drug. The taxpayer was convicted and sentenced to 18 months imprisonment. Shortly after his release from gaol in December 2011, he was served a Departure Prohibition Order. That order has remained in place and has prevented the taxpayer’s return to Bali.
Following an audit of the taxpayer’s affairs, the Commissioner issued default assessments. The taxpayer’s taxable income was assessed as follows: id=”mce_marker”91,699 for the 2009 year, $765,342 for the 2010 year, and $37,439 for the 2011 year – with penalties in excess of $350,000. The Tribunal heard details of documents obtained by the Commissioner relating to bank accounts and a boat, and the Commissioner’s conclusions that the taxpayer was an Australian resident and that the amounts in question related to earned income. The taxpayer’s objection to the assessments was disallowed and he appealed.
The AAT was satisfied the taxpayer was not a resident of Australia according to ordinary concepts during any part of the 3 years in question. The AAT was of the view the taxpayer had not been residing in Australia since mid-2006 and that he had established a home in Bali from early 2008. It said the taxpayer’s visits to Australia (even though some were initially lengthy) “did not destroy the continuity of association he had with Bali…”. Accordingly, the AAT remitted the matter to the Commissioner with a direction that the taxpayer’s objections be allowed in full.
(AAT Case [2013] AATA 780, Re Murray and FCT, AAT, Hack DP, Ref Nos: 2013/2150; 2013/2151; 2013/2152, 1 November 2013.)
[LTN 213, 4/11/13]