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Does living in multiple overseas countries break Australian residency?

Does living in multiple countries break residency?

Dan Hodgson and Ablean Saoud review a recent Administrative Appeals Tribunal (AAT) decision that has again shown the obstacles to breaking Australian residency.


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The AAT case of Handsley and Commissioner of Taxation [2019] AATA 917 considered the question of whether a taxpayer had ceased Australian residency and taken up a permanent place of abode elsewhere – this time when their time was split between many countries outside Australia.


The taxpayer was an Australian citizen who lived in Australia up until 30 June 2012. Following separation from his wife of 17 years in July 2011, he commenced a relationship with a new partner, a Philippine national. In July 2012, he left Australia and commenced a 3 month contract with an agency (later extended to 11 months).

During the 2013 income year, the taxpayer lived in multiple locations for short periods and only 50 days were spent in Australia. Even fewer were in the Philippines (21 days) which he argued was his new home, as he primarily spent time with his new partner in Vietnam (43 days), Singapore (22 days) and Malaysia (8 visits totaling 127 days). He did not own a motor vehicle in Australia and sold what had been his Australian family home leaving his only Australian assets as his super funds and bank accounts.


The question was whether, during the 2013 income year, the taxpayer was a resident of Australia (in which case he would be taxed on his worldwide income) or a non-resident of Australia (and taxed on only his Australian sourced income).


For the taxpayer to prove that he was not an Australian resident under subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936), he was required to show that:

  • he did not reside in Australia (under ordinary concepts); and
  • he had either:
    • changed his domicile to a place outside of Australia: or
    • had a permanent place of abode outside of Australia.


To continue reading about the AAT case of Handsley and Commissioner of Taxation, please log on to KPMG Tax Now.

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