BULAW5916Taxation Law & Practice Assignment Purpose The purpose of the assignment is to enable you to research and explore an aspect of taxation law. Word limit The length of the assignment is to...

Taxation law
Harding v Commissioner of Taxation [2018] FCA 837& Harding v Federal Commissioner of Taxation [2019] FCAFC 29
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Contents
Introduction    2
What are the tax implications for Australians who are living as expats in other counties?    2
What are the implications for the application of the ordinary concepts test?    4
What are the implications for what can constitute a permanent place of abode and why is this important?    6
Conclusion    8
References    9
Introduction
In the case of Harding v Taxation Commissioner FCA 837, on June 8, 2018, the court ruled that some Australian citizens residing outside Australia and living abroad were Australian citizens. Tax residents in Australia, because its fully furnished apartments abroad were not sufficiently permanent and this decision underscores the difference between the types of property moreover how property is use when it may comes to residency of tax as well as when home is set up overseas for Australian migrants.
What are the tax implications for Australians who are living as expats in other counties?
The tax residency in Australia determines which income is subject to the Australian tax. Specifically, Australian tax residents pay worldwide income tax while Australian nonresident only pay tax on the Australian expenditure income (Balla, 2017). Taxes for non-resident residents and employers outside Australia often result in lower taxation rates. To be considered an Australian resident, freely, an Australian resident must complete the following tests: 1. The 'Resident' Test: The person does not live or reside in Australia; or 2. 'Permanent Residence' test: person has lived outside Australia. The court acknowledged that the permanently furnished accommodation amounted to a permanent residence. But, in this example court finds that temporary purpose and actual utilize of residence is critical. Therefore, foreigners must consider their arrangement for living abroad in context of permanent degree from first day (Fredericks, 2013). Other aspects including accommodation, mail arrangements, heavy furniture acquisition and utility contracts, etc. are also critical. Considering the complexity of determining residency of tax for the Australian immigrants, the attention of Australian Taxation Office on the area as well as possible financial implications, we suggest that all foreigners seeks tax advice before moving abroad. We hope that Harding's decision on appeal is null and void. The query of whether a person has established permanents 'place of residence' overseas should come here simply and in a general sense, considering whether the taxpayer has only one temporary residence in the country. For the purpose of residency, a place must be permanent if it is not temporary or one cannot have certainty. Being in the middle of a temporary and permanent state certainly means you can't have a residential third class. If the court agrees that Mr Harding 'made his life in Bahrain (Giertz & Feldman, 2012) ', he must admit that he has a permanent residence there, regardless of where he sent the postal. Is advisable to conclude by considering Fisher J's frequently quoted words in the Applegate Proper construction on the phrase "permanent residence" made me realize that it was the taxpayer's fixed and permanent residence (Gordon, 2010). This is his home, however not his permanent residence. The main factor to consider is the taxpayer's presence, period of his presence, furthermore durability of his stay at a particular place.
Harding v Federal Commissioner of Taxation [2019] FCAFC 29
The trial judge found that the taxpayer’s absence from Australia and no intention to return was sufficient to terminate his residency in Australia – whether or not the taxpayer was an Australian resident. In Harding v. Tax Commissioner [2019] FCAFC 29, an Australian expatriate resides in an Australian temporary residence in Australia, although he maintains many personal and financial relationships with Australia because he gave up his Australian residence in a permanent manner. . The question for the federal court is whether Harding is an Australian resident of the income year ending June 30, 2011. Australian residents are persons residing in Australia, including those living in Australia, unless the Commissioner is convinced that the person's permanent residence is outside Australia. The main judge found that Harding was a resident of Australia in 2011 because although he did not live in Australia, he did not establish a permanent residence outside Australia. Harding lived in a temporary residence in Bahrain because his intention was to get a house after his family moved there. This is not enough to establish a permanent place of residence outside Australia. In the victory of foreigners, the federal court held that the main judges’ views on permanent residence were too narrow, considering the purpose of the definition of the residents, that is, those living in Australia were not affected by income. Once they give up their Australian residence in a permanent way, they are taxed. The Parliament does not intend to require someone to live permanently in a particular residence without paying income tax. If this is the intention of the parliament, it will use the phrase permanent residence instead of permanent residence. In phrases outside Australia, the location of a word can refer to a town, state, or country in which a person lives permanently. The full federal court rejected such a claim that it would not matter if the person did not move permanently in one country but in a foreign country. The term permanent place needs to identify the country in which a person lives permanently.
What are the implications for the application of the ordinary concepts test?
Harding's decision is the need to change the law on taxation of individuals in Australia. It explains how uncertain rule is in this area, with its overlapping, elaborate multi-tiered tests, which Derrington himself acknowledges, as well as the application of the "domicile test", as in "general concept testing" (Green & Phillips, 2015). "In many cases lacking accuracy", and "reasonable persons may differ according to definition". The decision in...