Residency questions confuse investors

Whether someone is classed as an Australian resident for tax purposes has a major effect on what they pay tax on and at what rate. By the flood of questions sent in from readers both here and overseas the matter of residency causes many problems. Because of the complexities in this area, and because every case is judged on its own facts, professional advice should be sought to ensure you get the right answers.

Q. I have a three year contract in Doha. I rent an apartment there but still have a house in Kiama which my children live in. I receive no income from this. I pay no income tax on my wages in Doha and transfer money into my bank account to pay the mortgage in Australia. It is also an offset account for the loan that we pay bills out of. My accountant advised that I should be classified as a non-resident as I have a three year contract and rent an apartment in Doha. My wife has taken leave without pay and currently does not work in Doha. Do you think I am a non-resident for tax purposes?

A. The question of Australian tax residency can in some cases be very easy, while in other cases it can be extremely hard. At the heart of deciding tax residency is the intention of the taxpayer. Where this cannot be established clearly the Australian Taxation Office applies various tests to work out what a taxpayer

About the author