One of your existing clients has come to you for some advice related to his tax affairs.

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Question:

One of your existing clients has come to you for some advice related to his tax affairs. Fred Romberg is a 50-year-old Australian citizen, a skilled architect, and a proud Novocastrian. Fred is divorced, having separated from his wife of 20 years around two years ago. Fred’s 25-year-old daughter, Elena lives in a self-contained bungalow out the back of Fred’s house in Merewether with her fiancé while they save for a house of their own.

Fred specializes in designing boutique hotels, which typically results in him taking short-term employment contracts of one to three years – the time required to design and complete the project. Fred says that he has been offered a three-year contract for a job in Qatar with QBH. He explains that this is an exciting project and one where he will be well remunerated.

Fred says that the terms of the employment contract with QBH are that he needs to be on-site working with their team in Qatar. This means that he will leave Australia on 1 February 2022 and commence work shortly after arrival. Fred says that he intends to return to Australia at the end of the project, however, for the three-year duration of the project, he must be in Qatar for at least 44 weeks of the year. He says that he will receive 8 weeks of paid vacation leave per year where he can come to Australia or travel elsewhere as he pleases. Fred says that he plans on spending the majority of this in Australia as he likes the Australian climate and lifestyle and he can see his family and friends.

Fred says that he has packed up the furniture from his property in Merewether and he will lease the property for three years. His furniture will be put in storage until he returns. Fred says that he will leave his car with his daughter for her use, and he will also be able to use it when he returns for holidays. Elena will be able to stay in the bungalow at the back of Fred’s property. Fred also has an Australian superannuation fund valued at $300,000 and two transactional bank accounts with $15,000 that he will leave in Australia. He says that he has already opened a bank account in Qatar to receive his salary for the work there.

Fred says that QBH has organized a nice two-bedroom furnished apartment for him to live in however he will be required to pay market rent for this. He says that to make it feel more like the home he will take a few belongings that he can manage in his suitcase.

Fred says that he will not require a car in Qatar as everything is close by and there are good transport options available. When in Qatar, Fred says that he will try to live as normal a life as possible and plans to join the local ex-pat squash club as he is a keen squash player.

Required

In a professional letter (not exceeding 1,000 words), advise Fred whether on 30 June 2022 he will be assessed as a resident of Australia for income tax purposes. Also, advise Fred how his income will be assessed given both scenarios of him 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.