Residence Tests for Individuals: Impact of the Harding Decision

Abstract

The High Court has refused the ATO special leave to appeal from the Full Federal Court decision in FCT v Harding. This case has particular importance for individual taxpayers attempting to determine whether they are Australian residents or non-residents for income tax purposes. The two tests directly affected by the Harding case are the domicile test and the 183-day test as per s 6(1) of the Income Tax Assessment Act 1936. This article analyses the Full Federal Court decision in Harding and provides an insight as to how the two tests should be applied according to law. In so doing, the article dissects IT 2650 and TR 98/17, and suggestions are made that those rulings need to be withdrawn or substantially revised.

This article has first appeared in Taxation in Australia, Vol 54(6) and has been reproduced with permission from the Tax Institute.

Keywords: Residence tests, Harding decision

JEL Classification: K34