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Taxpayer Residency - The Full Federal Court has upheld an appeal by the Glenn Harding in Harding v Commissioner of Taxation, ruling that the taxpayer’s “temporary” apartment qualified as a “permanent place of abode” under the tax residency test and was not liable for tax in Australia.
The case:
Mr Harding had departed Australia in 2009 to live and work in the Middle East, living in an apartment in Bahrain.
The original plan was for Mr Harding’s wife and youngest son to join Mr Harding in Bahrain at the end of 2011 but the plan never eventuated, with the couple separating and his wife remaining in Australia.
The ATO assessed Mr Harding on the basis that he was a tax resident of Australia for the 2011 income year.
The ATO argued that the taxpayer did not have a ‘permanent place of abode’ outside Australia because his first apartment was only ‘temporary’ while he waited for his wife and child to join him in Bahrain.
The Full Federal Court rejected the ATO’s argument and concluded that the relevant consideration was whether the taxpayer had abandoned his residence in Australia.
Law firm Cooper Grace Ward, who acted on behalf of the taxpayer, said the case now gives expatriates living in serviced apartments or hotels on long term arrangements certainty, where they can show they have abandoned their residence in Australia.

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