Updated: Feb 3
According to the Department of Foreign Affairs and Trade over 300,000 Australians have returned to Australia since March. It is becoming increasingly likely that many of them will become Australian tax residents if they cannot or choose not to return to the countries that they were residing in before the pandemic broke.
If you have a client who is in this position, it will be important to advise the client using the framework of existing residency law and not to assume that the law would provide too much flexibility for the client.
In our previous blog post from the 27th of March, we discussed the relevance of intention as it pertains to residency and the ATO’s initial guidance about residency during the pandemic. The two main tests will be;
(i) the resides test - is the client now residing in Australia according to ordinary concepts?;
(ii) the domicile test - does the client still have a permanent place of abode overseas?
If the answer to (i) is no because they do not have an intention to stay, they will nonetheless be resident of Austral