Appeal News: Leave sought for High Court Appeal in Addy

10 November 2020

The taxpayer has sought leave to appeal to the High Court from the decision of the Full Federal Court in FC of T v Addy 2020 ATC ¶20-756; [2020] FCAFC 135.

In that case, the Court held that a working holiday maker was required to pay the “backpacker tax” and was not entitled to benefit from the tax-free threshold.

In a case we have been following very closely at Expand, the taxpayer has sought leave to appeal to the High Court from the decision of the Full Federal Court in FC of T v Addy 2020 ATC ¶20-756; [2020] FCAFC 135.

The case was primarily a 'back-packer' case and the main issue was whether the taxpayer, Ms Addy, was discriminated against (on contravention of the Australia-UK Double Taxation Agreement), by the application of the 'backpacker tax rates' to her income.

However, if appeal is allowed we are especially interested to see whether the High Court will deal with how the 183-day test should be applied in practice. The Full Federal Court in its decision, dealt extensively with the 183-day test.

Particularly in the light of the COVID19 pandemic whether it is practical, or expected, that the 183 day test, should be a 'self executing test' in situations where a person has been in Australia for more than one-half of the income year.

For the current Australian tax year that will end 30 June 2021 we believe thousands if not tens of thousands of Australian's will be hear more than 183 days and may be intending to return. There is no guidance from the ATO as to whether clients in this situation must approach the Commissioner to consider all the facts and circumstance of their case and particularly whether they intended to reside in Australia or whether they have a usual place of abode overseas.