Was Ms. Addy considered an Australian resident for the whole of the 2017 tax year because she met the 183-day rule?
When someone comes to Australia, they're usually seen as a resident if they live here normally or stay for more than 183 days. This rule is mentioned in section 6(1) of the ITAA 1936 and Taxation Ruling TR 98/17.
The court decided that Ms. Addy was a resident based on normal living concepts until she left Australia on May 1, 2017. They believed her shared house in Sydney was her main home and where she spent most of her time for work and socializing. Even though she did some short-term work in Western Australia, it wasn't enough to make her a traveler because it was mainly to extend her visa, especially to stay in Sydney.
Although some things suggested Ms. Addy wasn't a resident (like what she wrote on her arrival and departure forms, and the fact she had a home and belongings overseas), these things alone didn't decide her residency. They had to be looked at along with everything else about her situation.
Regarding the 183-day rule, if someone is in Australia for more than half of the tax year and either lives here normally or plans to, they meet the rule.
Ms. Addy was in Australia for more than half of 2017, and the court thought she lived here normally and planned to stay. So, they said she met the 183-day rule.
But, the court didn't agree with Ms. Addy that meeting the 183-day rule meant she was a resident for the whole year. Since she left Australia before the year ended, they decided she was only a resident for part of the year and could only get part of the tax-free allowance for that year.
TAX ALERT – Most Working Holiday Makers (WHMs) aren't residents
Remember, Ms. Addy's case was decided based on her situation and doesn't mean all WHMs are residents.
Usually, WHMs aren't residents because they move around a lot and don't plan to stay in one place in Australia for long. They also usually have a home overseas and don't plan to live in Australia. Look at the Stockton v FCT [2019] FCA 1679 case for an example.
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