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  1. #1
    or TizYou?
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    Australian NON-Resident for tax purposes.

    You have to be careful if you want to remain a non-resident with the ATO.

    Bahrain apartment no permanent home Federal Court rules in tax case

    https://www.smh.com.au/business/the-...12-p4zkzl.html

    Renting out a fully-furnished apartment overseas may not be enough to convince the tax office that you are a non-resident for tax purposes.


    A court case involving former aircraft engineer Glenn Harding has highlighted the difficulty in determining a "permanent place of abode" in modern-day living.

    Mr Harding lived in Bahrain for more than five years in the same block of fully-furnished apartments but a recent Federal Court decision rejected this as being his permanent place of residence.


    On June 8 Mr Harding lost his Federal Court appeal against an undisclosed tax assessment from the Australian Taxation Office issued for the 2011 income year.


    He had appealed on the basis that he was not a “resident” in the relevant income year, but Federal Court Justice Roger Derrington rejected that partly because of the type of accommodation Mr Harding lived in.



    After living and working in the Middle East for some years and returning to Australia to live, in February 2009, Mr Harding received an offer of employment to join UK training firm TQ Education and Training Limited.


    The offer was to work in Saudi Arabia as the director of training and he would be paid a salary of $US175,000 ($231,000). In Saudi Arabia his income would not be taxed.


    Mr Harding left Australia in March 2009, with no intention of returning. He sold his personal possessions, including his boat and his car, before he left.


    While Mr Harding retained joint ownership of the family home in Warana on Queensland's Sunshine Coast, with his now former wife, it was so she and his children could continue to live there.


    His hope was his then wife (the couple have since split) and his youngest son would eventually join him in Bahrain and live with him.


    Mr Harding also had other investments in Australia and in 2011 sent back $168,000 to Australia for family expenses including mortgage payments, school fees and utility costs.


    Mr Harding still lives overseas, currently in Oman, and travels to Australia occasionally to visit his family.


    The judge accepted his argument that when Mr Harding left in 2009, he did not ever intend to reside in the Sunshine Coast property as his family home again.

    "Classic Towers": no permanent home

    But where the complication arises is when it comes to what a "permanent place of abode" is under the "domicile test".


    From about March 2009 until about February 2015, Mr Harding lived in Bahrain and travelled each day to Dannan in Saudi Arabia for work.


    Mr Harding lived in an apartment building called “Classic Towers”. He would move from unit to unit as his circumstances required, but remained located in the same unit block.


    Mr Harding was responsible for utility charges above a certain amount and telephone charges.


    He told the court these units became his home and, when he went on holidays, he would leave his personal belongings there.


    But Justice Derrington found that Mr Harding’s accommodation in the Classic Towers apartments “was of a temporary nature and type”.


    “It was of a kind where he did not put down his permanent roots in the sense of establishing his own home or dwelling,” Justice Derrington said.


    He noted that on each occasion on which Mr Harding moved “he was able to pack all of his belongings into a few suitcases and an overnight bag and use the elevator in the building to transport his assets to a new apartment”.


    The judge said items for added comfort such as extra televisions, “were not acquisitions which suggested that he was intending to make the apartment his permanent place of abode".

    Where the mail goes...


    Before their split, Mr Harding’s then wife had visited him in Bahrain and inspected properties that they were considering moving into together.


    On that basis, Justice Derrington said the Classic Towers apartments was for temporary use until permanent accommodation suitable for housing the whole family could be acquired.


    The judge also noted that Mr Harding also retained his address at the family home in Warana in Queensland as the address for important mail.


    He found that Mr Harding was not a resident under the "ordinary concept" test.


    While “there is no straightforward answer to the question of the construction of the domicile test" the judge reached the conclusion that Mr Harding did not have a "permanent place of abode" in Bahrain under this second test.


    Thereby Mr Harding was a resident of Australia in the 2011 income year, the court found, and dismissed his appeal.

  2. #2
    Thailand Expat AntRobertson's Avatar
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    Ridonkulous.

    ATO are utter cnuts.

  3. #3
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    So, as a tax rsident of Australia, he should qualify for social security/pension. The Revenue Department can't have it both ways.

  4. #4
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    Quote Originally Posted by Maanaam View Post
    So, as a tax rsident of Australia, he should qualify for social security/pension. The Revenue Department can't have it both ways.
    Yes, but they'd be wanting tax paid on his foreign earned income.

  5. #5
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    ATO bunch of thieving scum, about 7 years ago, went back to OZ, got a letter from the ATO, I owe them $2,800, phone the shit bags up, say I don't live here.
    So sad too bad 11% interest, I say take it out of my dole payments, we will, but as a non resident I can't get the dole.

    Told when the interest, by a tax lawyer friend, hits 20,000 AU they will confiscate my passport, no dole, find a doorway to sleep in.
    Think I will stay in Issan.

  6. #6
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by jamescollister View Post
    phone the shit bags up
    I think they are taught not to have email conversations so it is not in writing - all the govt parasite departments

    but if you own a residence in australia you are basically fcuked , as the rules for being a non resident and owning inaustralia are so convoluted that the final outcome is left up to their decision

    put your money in crypto and feign my me stang

  7. #7
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    Quote Originally Posted by TizMe View Post
    Yes, but they'd be wanting tax paid on his foreign earned income.
    I understand that.
    I also understand that to qualify for a pension one has to reside in Australia for at least ten years after turning 50. Someone like, say LT, may miss out on a pension because he is not resident. But this chap must be able to qualify since the court has ruled that he IS a resident.
    As I said, the government can't have it both ways: Tax you because you are resident and deny you a pension because you live over seas.

  8. #8
    Valve Master
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    Unfortunately they certainly try to get it both ways. If you live overseas for a few years they deem you to be non-resident for Medicare purposes, and deny you free care in hospital if you return.

    They differentiate between being resident IN Australia and a resident OF Australia, and flip between these definitions when it is convenient for them.

  9. #9
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    The specific term they use is "resident/non-resident for tax purposes"

    irrelevent for Medicare or pension purposes...

  10. #10
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    Quote Originally Posted by TizMe View Post
    The specific term they use is "resident/non-resident for tax purposes"

    irrelevent for Medicare or pension purposes...
    That's not fair. If you contribute to the tax pool you should be entitled to draw on it when needed.
    I know, I know...Just saying.

  11. #11
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    OK, so how does the Aussie government morally justify taxing you after you've been taxed in another country already, for work you have done there ? (If that is in fact what is happening).

  12. #12
    disturbance in the Turnip baldrick's Avatar
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    since mid 2009 after you have paid the tax to the country you have been working in , the aust govt wants the difference of what you would have paid if you had been working in australia

    canada does the same

    the aust govt also likes to tax you for any air fares the company you are working for has paid for you - fringe benefits tax

    they have no shame and wonder why people are disgusted by their antics as they flexitime in and out of their offices and claim priveliges that would get them laughed out of a job in any private sector position

  13. #13
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    ^^Australians living and/or working overseas need to have a seriously good tax adviser who specialises in Expats in their address book. I've worked with Expats from all countries around the world for 30+ years and of all them, Aussie's are the ones that have had their tax laws changed the most times in that period (at least 6 times that I know of). I've seen a few of them in tears - literally - as they've found out they're truly FUCKED and they have to sell all their assets to pay back taxes and penalties. Bottom line is and always was, if they have any ties to Australia they always had to pay taxes of varying percentages there (and the definition of ties is a very grey area).

  14. #14
    Thailand Expat jabir's Avatar
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    Quote Originally Posted by baldrick View Post
    I think they are taught not to have email conversations so it is not in writing - all the govt parasite departments

    but if you own a residence in australia you are basically fcuked , as the rules for being a non resident and owning inaustralia are so convoluted that the final outcome is left up to their decision

    put your money in crypto and feign my me stang
    Not supposed to be easy to get non-residency. Mate of mine went through the process, everything smooth till the very end when HMgov stung him a hundred and something squids for 'lying' because he had not in fact relinquished all of his assets. Seems he had an account he forgot about and hadn't used in some twenty years, but during that time accrued interest amounting to less than £1.

    He did the right thing, apologised for his oversight, thanked them for reminding him, closed the account, paid the 'fine' and now in the clear living it up with his cock being polished 3x a week in LoS and other exotic places.

    Do it right and they tend to let you go.

  15. #15
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    Yeah, I've got a letter (somewhere) issued to me by the ATO in about 1996 saying that I'm a non-resident for tax purposes.

  16. #16
    Thailand Expat jabir's Avatar
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    Quote Originally Posted by TizMe View Post
    Yeah, I've got a letter (somewhere) issued to me by the ATO in about 1996 saying that I'm a non-resident for tax purposes.
    Then you did it right, before it became tougher to break ties with the free world.

  17. #17
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    Having dependents back in Oz complicates it a lot as well.

  18. #18
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    I liquidated all assets in Aus when I left in mid-2009. Submitted my last Aus tax return that year as well. I subscribe to the late Kerry Packer view of paying tax which was that you were mad if you didn't do everything legal possible to pay the minimum necessary.

  19. #19
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    The whole idea of working overseas but getting taxed by the Australian government is disgusting to me.
    If tax has to firstly be paid in the country one works in, and then Australia, that stinks. And if someone is lucky enough to score a well-paying job in a foreign country with low tax, good on them. Let the Aussie government tax those earning in Oz, including foreign corporations who try to make money in Oz and spirit it our via tricky company structures. They are the ones top go after ! Double taxation is unforgivable and insulting.

  20. #20
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    There is no double taxation occurring. As an Aussie expat that has worked overseas I can vouch for that.

    What the Aussie Governemnt has said is that if you recieve any benfits from the goverment coffers then you must must submit an Aussie income tax return.
    And they deem having a residence in Australia as you receiving benefits i.e. roads, electricity, utilities etc.
    Also if you want to have a Medicare card then you must be an Australian tax payer.

    So when you earn your money overseas and pay taxes in the country where you earn that money the Australian government give you credit for those taxes paid.
    Then they add to that any income you have generated in Australia i.e. rent. This combined income is what is used to calculate total tax payable to the Aussie tax office minus the tax credit you earned by paying tax overseas.
    And your Medicare levy is calculated on the combined income i.e. overseas plus Aussie incomes.
    The reason they did this back when, was to prevent people working overseas and paying nothing towards the cost of the Medicare system and then coming back to Australia to use the "free" medical cover provided by Medicare.

    So in my case I don't have access to medicare, though that might change after I submit an Aussie tax return this financial year. At present I have no medical insurance cover at all which could be an issue if I have an accident or get really sick.

    There are a few other issues that should be considered but I won't go into detail here as they could be confusing to some.

    Cheers

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