Australia: Taxpayer was a non-resident (Mayhew case)
22 March 2013
Posted by: SAIT Technical
By Tax Institute Australia (TaxVine)
The AAT has held that a taxpayer, who commenced employment with an
engineering company in Abu Dhabi in December 2007, was a non-resident of
Australia for taxation purposes for the year ended 30 June 2008. The taxpayer
was held to have a permanent place of abode outside Australia.
The Commissioner relied upon a number of continued links that the taxpayer
had with Australia, particularly the fact that the taxpayer maintained his
Australian home in Paddington, Brisbane, following his departure in December
2007. The taxpayer's response was that although he maintained ownership of the
Brisbane residence, neither he nor is wife had any intention to live in it
again. The taxpayer argued that although the residence was leased to his son
under a relatively informal arrangement, he effectively abandoned his personal
interest in the property.
The Commissioner also relied on the fact that the taxpayer's wife did not
move with him to Abu Dhabi immediately. She wished to continue working, as a
nurse specialising in coronary care at the Queensland Institute of Medical
Research, until her contract finished in December 2008. She joined him after
that time. In relation to this, the AAT said at para 42:
"The Tribunal does not consider it to be of significance that Mrs Mayhew did
not join her husband in the Middle East immediately. She is clearly an
independent person with strong career interests, which she elected to pursue and
complete prior to joining her husband overseas. The Tribunal accepts Mrs
Mayhew's explanation that it was consistent with the lifestyle they had always
followed together that she would eventually abandon her job in Australia and
join her husband overseas; and this is precisely what occurred."
The AAT concluded at para 46:
"The Tribunal concludes that the [taxpayer] handled his departure from
Australia, and his relocation to the Middle East, in a manner consistent with a
person who had resolved to permanently leave Australia. He had to make
arrangements in relation to his children and the assets he was leaving behind.
And this he did in his own way and in his own time, according to the priorities
which would have been confronting him during this phase of his career."
Mayhew and FCT  AATA 130 (AAT, Dr Hughes M, 13 March 2013).