This post is an excerpt from the paper 'Residency – Individuals (and trusts)', this month's free technical paper for members.
Individual tax residency is a ‘hot topic’ which will only continue to be the case given the complexity and factual driven nature of the relevant tests and the increasing global mobility of individuals.
Cheap global travel and the opportunity to move between countries for work and lifestyle reasons must have seemed fanciful only a few years after Charles Lindberg’s ground-breaking 33 ½ hour flight in 1927 across the Atlantic.
In 2018, the Board of Taxation (Board) recommended a new bright line test. The then Assistant Treasurer ‘welcomed’ the report and asked the Board to consult further on the recommendations.
Whether this stays a reform priority is the aftermath of the May 2019 Federal election remains to be seen.
As the authors note, the Australian individual tax residency tests are multi-faceted, complicated, and difficult to apply and desperately in need of reform. Given the increasing global mobility of individuals this difficulty will only continue, and the complications get worse, until a change to the rules occurs.
Members, you can access the paper here.
About the authors
Neil Brydges, CTA, is a Principal Lawyer in Sladen Legal’s tax group. Neil practises in all areas of direct and indirect tax with a focus on the taxation of trusts, corporate tax, mergers and acquisitions, international tax, and Division 7A. He is an Accredited Specialist in Taxation Law and Chair of the Tax & Revenue Law Committee with the Law Institute of Victoria and a Chartered Tax Adviser and member of the SME, Dispute Resolution, and GST Technical Committees with The Tax Institute.
Sam Campbell, ATI, is an Associate with Sladen Legal.