Foreign Income - the concept of residence
Foreign Income - the concept of residence
The concept of residence
The generally accepted definition of residence is
where a person lives -that is
eats, sleeps, and carries on his every day activities.However the Income Tax Assessment Act broadens this definition resident - how is it defined in the section 995 of the Assessment Act?
Australian resident means a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936.
So it is necessary to go to the definition in Section 6 of the 1936 Assessment Act. Section 6 starts by defining a
resident as a person who resides in Australia.So...If a person resides in Australia the Act will treat him as a resident
But what about the person who is not resident for the full year?
Section 6 includes 3 classes of persons in the definition of resident
a person whose domicile is in Australia unless his permanent place of abode is outside Australia
a person who has spent more than half the year in Australia unless his place of permanent abode is outside Australia
an eligible employee and dependants for the Superannuation Act (eg diplomats)
. Now apply your knowledge to these cases
Look at the CCH Master Tax Guide paragraph 21-020. The taxpayer, Mr Applegate retained an Australian domicile but had a permanent place of abode outside Australia because the period of his absence was indefinite.
(You might need to refresh your memory of the definition of 'resident' by referring to section 6.)
Answer this question….
A bank officer agreed to be transferred to the New Hebrides for 3 years.
Would his income be taxable? enter y for yes, n for no
Yes No
Refer para 21-020 - CCH Master Tax Guide
The taxpayer, Mr Jenkins, did not have a permanent place of abode outside Australia - his intention was to return in 3 years
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