Nicholas who has always lived in Australia, is sent by his employer (which is a very large
Question:
Nicholas who has always lived in Australia, is sent by his employer (which is a very large Australian mining company) to work in Indonesia at a mining site on 1 July of the current tax year. He has agreed to be away for a period of 2 years and his employer guarantees that after that time he will have his choice of mine sites to work at in Australia. Nicholas returned to Australia for a 3 week period from 24 December visiting family and friends, but does not spend any other time in Australia in the current tax year ending 30 June. Prior to leaving, Nicholas sold his Brisbane unit and his car. He maintains a term deposit in an Australian bank account in which he has $300 000 but has no other assets in Australia. Nicholas stays in rented accommodation in Indonesia at the mine site and purchased no major assets in that country. His wages are paid into a Swiss bank account. In relation to Nicholas's residency status for Australian taxation in the current tax year ended 30 June, which of the following statements are most correct?
1. Nicholas would appear to retain his Australian domicile but may not be a resident under the domicile test because he may have established a permanent place of abode outside Australia.
2. Nicholas is most likely still a resident of Australia under the common law test because he was a resident in the previous year.
3. Nicholas is not a resident of Australia because he has not been in Australia for more than one half of the year of income as required by the 183 day rule.
4. Nicholas is likely to be a resident under the domicile test because he intends to return to Australia after the two year period in Indonesia.
5. Nicholas will be a resident of Australia because he has an Australian domicile.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill