Mr. Bony Abbot, your client was born in Melbourne and lived in Australia until 2 July of the current tax year. At that stage, he accepted a voluntary redundancy with Virgin Australia. A year earlier he had separated from his wife of 20 years. A few months later he started a relationship with a resident of Singapore.

Upon accepting the redundancy, he began travelling overseas to perform aircraft mechanic services at various locations within Asia. Under his contract of employment with Boeing, the taxpayer was provided with either hotel or short-term apartment accommodation at each location he attended for work purposes.

During the current income year, the taxpayer provided services in Malaysia, Portugal, Italy and Indonesia. The longest time he stayed at any one place was 45 days in a serviced apartment in Italy. The taxpayer visited his two teenage children and his parents in Australia on two occasions for a total of 30 days and visited his new partner in Singapore on four occasions for a total of 50 days. During the tax year what had been the family home in Melbourne was sold to a divorce settlement. While he no longer had any place in Australia in respect of which he could call his own, he also did not have ownership or leasehold in any dwelling outside Australia. Nor did he apply for a long-term visa or residency status anywhere outside Australia.

Advise your client whether he is a resident of Australia in the current tax year for income tax purposes. (Your answer should assume the taxpayer was able to travel normally and without Covid-19 restrictions during the period under consideration.)

Required

In a professional letter from you, the tax adviser, to advise Mr Bony Abbot whether at 30 June 2022 he will be assessed as a resident of Australia for income tax purposes.

Also advise Mr. Abbot how his income will be assessed given both scenarios of his being deemed a resident or a non-resident of Australia for taxation purposes.

Show appropriate referencing to case law, sections of the ITAA 1936 and ITAA 1997 and income tax rulings issued by the Australian Taxation Office. Ignore any consequences of the Double Tax Agreement between Australia and countries he has worked in.

Answer rating: 100% (QA)

Introduction Dear Mr Bony Abbot I hope this letter finds you well As your tax adviser I understand the complexities surrounding your tax residency status for the current tax year The factors of volunt... View the full answer