residency remains a linchpin in the modern day tax industry.
CTA, Pointon Partners , about his
session, Recent Developments in the Tax Residence of Individuals, Companies and Trusts which will focus on the Board of Taxation’s consultation guide,
legislative developments within residency and the flow-on consequences for the
residence of trusts.
When we spoke to Robert, we asked what these proposed changes mean for practitioners and what he believes are the blind spots in relation to individuals, companies and trusts?
Robert explained, for individuals, ‘there is a wide-spread myth that leaving Australia for as short a period as two years, will necessarily suffice for an individual to become a non-resident for tax purposes. This has probably arisen due to para 25 of IT 2650 which actually only says that an absence of 2 years “would generally be regarded by this Office as a substantial period for the purpose of a taxpayer’s stay in another country”. However, since that ruling issued in 1991, the substantive limitation of the s23AG exemption for foreign source employment income in 2009 has resulted in many more individuals claiming they are not residents, resulting in many cases, in which only a limited number of taxpayers have been successful’.
Robert warned, ‘This will cause considerable risk for Australian owned multinationals, particularly private groups’. Following this, Robert will also discuss, ‘The fact that the trustees of a trust are all non-resident of Australia won’t give assurance that the trust in a non-resident, if there is a principal in Australia that constitutes the trust’s central management and control, on the same principles as set out for companies in the Bywater case’.
Recent Developments in the Tax Residence of Individuals, Companies and Trusts
at the April Breakfast Clubs in Melbourne and Geelong on Wednesday 17 April at
Rydges Geelong and Thursday 18 April at Leonda by the Yarra, Hawthorn.
of tax residency?