Question

Elijah is a lawyer who works in Singapore. He is single and lives in Singapore with his
parents. Until April 2018 his work did not involve travel. At that time,he accepted an offer
from Legal Ease, his employer, to travel temporarily to Australia to provide legal advice to
large numbers of former residents of Singapore setting up businesses in Melbourne,
Adelaide and Hobart. Elijah enters Australia on 25 April 2018. He intends to spend three
months travelling between the three cities, staying in various motels. Legal Ease asks
him towards the end of the three months to take up a position in Hobart for a further nine
months. In early July, he leases a serviced executive apartment for nine months near his
workplace in Hobart. The apartment is his home base during his stay in Australia. He
freights more clothing and some personal effects to Australia. Elijah’s parents visit him on
two occasions. Although based in Hobart, his commitments require some limited travel.
On average, Elijah travels at least once a week to meet clients outside Hobart.
Required:
Advise Elijah whether he is a resident of Australia for tax purposes
In your response give reasons and refer to sections of legislation and cases, where
relevant.

Answer 1

Answer:

Criteria for Individuals to be considered a tax resident

To reside in Australia, you need to display behaviour over a period of time that is consistent with residing here, such as:

a degree of continuity routine habit.

Therefore, the period of time that you spend in Australia is not, by itself, decisive in determining your residency status.

We consider that six months is a considerable time when deciding whether your behaviour is consistent with residing here. That is not to say that if you are here for less than six months, you will always be considered a foreign resident, and if you are here for more than six months, you will always be considered an Australian resident. Generally, it is a combination of the factors of time and behaviour while in Australia that will determine your residency status.

An individual is considered to be an Australian tax resident if the individual “resides” in Australia according to the ordinary meaning of that word (subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936)). The ordinary concept of residency takes into account a person’s overall circumstances in the relevant income year, including:

 the intention or purpose of the individual’s presence in Australia;

 the extent of the individual’s family or business and employment ties within Australia;

 the maintenance and location of the individual’s assets; and

 the individual’s social and living arrangements.

Taxation Ruling 98/17 provides the Australian Commissioner of Taxation’s interpretation of the ordinary meaning of the word “resides” within the definition in subsection 6(1) of the ITAA 1936.

so according to the above provisions Elijah is resident of australia for tax purposes because he is in Australia for more than six months and satify all the conditions as per the above section.

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