Was Ms Addy a resident for the whole of the 2017 income year by virtue of satisfying the 183-day test?
An individual entering Australia is typically regarded as a resident where they are considered to reside in Australia under ordinary concepts and/or they satisfy the 183-day test. Refer to S.6(1) of the ITAA 1936 and Taxation Ruling TR 98/17.
Based on the facts of the case, the Court held that Ms Addy was a resident under ordinary concepts in the 2017 income year up to the date she left Australia (on 1 May 2017). In the Court’s opinion, the share house accommodation in Sydney had become Ms Addy’s usual place of abode, as it was her home and the settled centre of her life for work and social purposes. While she had undertaken some short-term rural work in Western Australia, she was not itinerant as this was done purely for the purpose of extending her visa to remain in Australia (and in Sydney, in particular).
While certain factors pointed towards Ms Addy not being a resident (e.g., statements made in her incoming and outgoing passenger cards, as well as the fact that she had a family home overseas where she once lived and where some of her possessions remained), these factors were not in themselves determinative and had to be considered in the context of her overall circumstances.
In respect of the 183-day test, an individual effectively satisfies this test where they have been in Australia (continuously or intermittently) for more than half the year of income, and either:
- their usual place of abode is in Australia; or
- they intend to take up residence in Australia.
Ms Addy had been in Australia for more than half the 2017 year of income. In addition, the Court was of the opinion that her usual place of abode was in Australia and that she intended to take up residence here. On these facts, Ms Addy was held to have satisfied the 183-day test.
However, the Court did not share Ms Addy’s view that, by satisfying the 183-day test, she was deemed to be a resident for the whole of the 2017 income year. Rather, as Ms Addy left Australia prior to the end of the year, the Court concluded that she was a resident for only part of the income year (i.e., up to her date of departure), and was only eligible for a part-year tax-free threshold.
TAX WARNING – Most WHMs are not residents
It should be noted that Addy’s case was decided on its facts and does not provide authority for all WHMs to be residents.
In most cases, WHMs are not residents under ordinary concepts or the 183-day test. A majority of WHMs are itinerant and do not plan to live and work at any one location in Australia for an extended period of time. In addition, they generally maintain a usual place of abode overseas and do not intend to take up residence in Australia. Refer, for example, to the decision in Stockton v FCT  FCA 1679.
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