Joubert and Commissioner of Taxation (Taxation)
[2020] AATA 2645
•3 August 2020
Joubert and Commissioner of Taxation (Taxation) [2020] AATA 2645 (3 August 2020)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2017/5932
Re:Mark Joubert
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:3 August 2020
Place:Sydney
The reviewable decision is affirmed.
...........................[sgd].............................................
Mrs J C Kelly, Senior Member
CATCHWORDS
TAXATION – residency of tax payer – whether resident according to ordinary concepts – Applicant worked overseas to financially support family residing in Australia – Applicant lived in rented accommodation leased by employer – decision affirmed
LEGISLATION
Income Tax Assessment Act 1936 (Cth) s 6
Income Tax Assessment Act 1997 (Cth) ss 6-5, 6-10, 995-1
Tax Administration Act 1953 1953 (Cth) s 14ZZK
CASES
Dempsey v FCT (2014) 98 ATR 698, [2014] AATA 335
Gregory v DFCT (WA) (1937) 57 CLR 774
Hafza v Director-General of Social Security (1985) 6 FCR 444
Harding v FCT [2018] FCA 837
Harding v Commissioner of Taxation (2019) 365 ALR 286
Iyengar v FCT (2011) 85 ATR 924, [2011] AATA 856
Joachim v FCT (2002) 50 ATR 1072
Lysaght v Inland Revenue Commissioners (1928) 13 TC 511
Re Dempsey and FCT (2014) 98 ATR 698, [2014] AATA 335
Re The Engineering Manager and FCT [2014] AATA 969Sneddon v FCT (2012) 89 ATR 739, [2012] AATA 516
SECONDARY MATERIALS
The Macquarie Dictionary 5th Ed. (2009)
New Shorter Oxford English Dictionary Vol.2 (1993)
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
3 August 2020
Introduction
The question the Tribunal has to decide in these proceedings is whether Mr Joubert was a resident of Australia as defined by section 6 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) for the year ending 30 June 2015 (2015 income year). The question arises because Mr Joubert took up a position in Singapore in July 2014, after living and working in Australia from 2010.
On 10 February 2017, the Australian Taxation Office (ATO) wrote to Mr Joubert advising him that based on information it had received, he may need to lodge a tax return. On 27 February 2017, Mr Joubert’s representative replied that 2015 and 2016 tax returns had been lodged on the basis that Mr Joubert was a non-resident of Australia for tax purposes.
Much correspondence ensued. The notice of assessment was issued and was dated 30 May 2017.
On 24 August 2017 the reviewable decision was made disallowing Mr Joubert’s objection to the notice of assessment for the 2015 income year lodged on 8 June 2017 (the objection decision).
Procedural matters
The case of Harding v FCT was relevant to the issues at the hearing of this case (Harding).[1] Mr Harding had appealed to the Full Court of the Federal Court. On 7 March 2019 the Respondent advised the Tribunal and Mr Joubert that the Full Court had published its decision on 22 February 2019, raised the matter of further submissions addressing the decision, and requested that they await the expiry of the period within which a special leave application had to be filed for a further appeal to the High Court.[2] On 22 March 2019 the Respondent lodged an application for special leave in the High Court. The parties agreed to await the outcome of that application. On 13 September 2019 the High Court refused the application.[3] The parties then filed supplementary submissions in the Tribunal addressing the effect of the Full Court’s decision. Mr Joubert’s circumstances had changed in several respects between the time of the hearing and the filing of the submissions addressing Harding FFC. They are referred to in the following reasons for decision.
[1] [2018] FCA 837.
[2] Harding v Commissioner of Taxation (2019) 365 ALR 286, [2019] FCAFC 29 (Harding FFC).
[3] Commissioner of Taxation v Harding [2019] HCATrans 191.
Relevant legislative provisions
An applicant has the burden of proving that an assessment is excessive or otherwise incorrect: section 14ZZK of the Taxation Administration Act 1953 (Cth) (the TAA).
An “Australian resident” is generally assessable on ordinary and statutory income derived from all sources, whether in or out of Australia, during the income year: sections 6-5(2) and 6-10(4) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). In contrast, a “foreign resident” is generally assessable only on ordinary and statutory income derived from all Australian sources, during the income year: sections 6-5(3) and 6-10(5) of the ITAA 1997.
The expression “Australian resident” is defined in subsection 995-1(1) of the ITAA 1997 to mean a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936).
The definition of “resident” or “resident of Australia” in subsection 6(1) of the ITAA 1936 includes not only a person who “resides” in Australia within the ordinary meaning of that word (referred to as the “ordinary concepts test”), but also a person who satisfies any one of three additional statutory tests set out in subsection 6(1)(a)(i) to (iii) of the ITAA 1936, namely (i) the domicile test, (ii) the “183 day” test or (iii) the superannuation fund test. Accordingly, even if a person is found not to be a resident of Australia according to ordinary concepts, the person will nevertheless be resident in Australia if he or she satisfies any one of the three additional statutory tests in subsection 6(1)(a) of the ITAA 1936.
The issues
The Respondent accepts that Mr Joubert did not satisfy the 183 day test or the superannuation fund test of residency in the 2015 income year. It contended that Mr Joubert is correctly characterised as a resident of Australia in the 2015 income year under the “ordinary concepts” test and/or the “domicile” test. Those are the issues for the Tribunal to determine.
The facts
Much of the evidence was uncontentious. The relevant facts are set out below.
Mr Joubert, his wife and two young sons moved to Australia from South Africa in 2010 when he accepted a position in Perth with a large Australian resources company. His expertise is in shipping operations. His sons were born in 2001 and 2005. They lived at the one address in South Africa from 2004 until 2010.
Following the decline in the Australian mining boom, Mr Joubert accepted a position with a small shipping company in Perth which ended after five months. He was then unemployed for ten months before he accepted a position in Singapore in July 2014 with one of the largest dry bulk shipping companies in the world. He was the Operations Director and had responsibility for Singapore, Tokyo and later Melbourne after he took up the position. Responsibility for Vancouver was added later. He has to travel to each of the offices outside Singapore.
Mr Joubert’s employment contract was dated 7 July 2014. Clause 3 provided for a probation period of six months. The contract specified no end date.
The offer of employment dated 9 May 2014 stated that his employment was subject to his obtaining an employment pass from the Singaporean Ministry of Manpower. A pass is specific to each employer within Singapore. The first pass was issued on 8 July 2014 and had an expiry date of 8 July 2016. His employment pass was renewed on 18 January 2016 and expired on 8 July 2019. If he lost his employment, he had to leave Singapore within 60 days.
The contract provided for 24 days paid leave per calendar year which had to be used by March of the following year.
When he took up the position in Singapore in July 2014, Mr Joubert was a citizen of South Africa and held an Australian Permanent Residence Visa.
On 6 November 2014, Mr Joubert was granted Australian citizenship. He had applied before knowing that he had been offered the position in Singapore. He retains his South African citizenship.
He has lived in the same apartment in Singapore since August 2014. The Inventory List completed at hand-over on 31 August 2014 and signed by Mr Joubert and the landlord, shows that it comprises an entrance, kitchen, living room area, balcony, master bedroom, bathroom and study. The Tribunal notes that the Respondent’s description of the configuration of the apartment was not consistent with that document and the Tribunal does not accept it.
Mr Joubert provided photographs of the apartment which identified items he had purchased including furniture, a rug, a clock and a pushbike. The Tribunal accepts that the apartment was furnished by Mr Joubert, with items such as the stove and washing machine being provided by the landlord.
The photographs show that the apartment has an L-shaped room, a separate bedroom and bathroom. There is a bunk bed in the bedroom.
At the top of the “L” is the entrance door with a storage unit to its right. Looking from the door to the balcony at the other end of the “L” are the following:
·A pushbike leans on the wall to the left of the door;
·On the right-hand side is a kitchen unit comprising a stove top, sink, drawers and cupboards above and cupboards at floor level;
·A small dining table and four chairs are opposite the kitchen unit;
·Beyond the table and chairs is a shelved table on which there is a toaster and a microwave oven on the shelf below; opposite that and next to the sink is another taller similar table on which there is a dish drainer;
·Beyond the kitchen/dining area, and before the balcony, is the living area which has a lounge against the wall on the left and a storage unit about 1.5 metres high opposite the lounge; the storage unit has a television in the middle section.
The space on the other side of the storage unit in the foot of the L-shaped room contains a double bed. It is not a separate “room”.
In summary, the apartment is compact.
The lessee of the apartment was Mr Joubert’s employer until the lease was renewed on 12 July 2018 when he became the lessee. The lease has been renewed on two occasions. The first lease was for two years, ending in July 2016. When the lessee was his employer, Mr Joubert was listed on the lease as the “occupier”. Clause 6(e) provided that despite the lease being for 24 months and only being “determined after 12 months”, it could be determined by “two months’ rent in lieu” if the tenant required the occupier, its employee, to leave Singapore permanently on a job transfer or if his employment were terminated.
A Letter of Undertaking dated 24 July 2014 from the employer to Mr Joubert set out his responsibilities as the occupier of any rental apartment “contracted on your behalf with the Landlord”. His employer deducted the amount of rent from Mr Joubert’s salary and paid the landlord. Mr Joubert has been responsible for paying utilities, maintenance and cleaning before handback of the apartment during his occupation of the premises. The employer could withhold the equivalent of one month’s rent if the employer-employee relationship ended.
The current lease ends on 31 July 2020. Clause 1 provides that the lease is for 24 months. Clause 6(e) provides that notwithstanding clause 1, the tenant may terminate the lease “on whatsoever reasons” by giving the landlord not less than two months’ prior written notice or by paying two months’ rent.
The Tribunal accepts the evidence of Mr Joubert and the landlord that he, and not the employer, dealt with the landlord to negotiate the lease and about any maintenance issues and that the landlord required the lease to be with his employer for financial protection. It accepts that the landlord was prepared to issue the lease directly to Mr Joubert after he had occupied the property for four years.
Mr Joubert owns no property in Singapore and does not own or lease a motor vehicle.
On 16 August 2017, his representative described his “Social and living arrangements” as:
Due to the nature and responsibility of his position including the travel, he has limited spare time however in his spare time in Singapore he enjoys regularly cycling around Singapore with small groups of friends, swimming in the various aquatic centres and being a sporting spectator with social groups.
Mr Joubert’s wife and two sons have continued to live in Perth since July 2014. When he took up the position in Singapore, his older son was 13 years old and had started his first year of high school. His younger son was nine years old and in primary school. His wife has not had paid employment since the family moved to Australia. She and their sons are financially dependent on Mr Joubert. During the 2015 income year, Mr Joubert remitted the majority of income to his family in Perth. He remits money on a monthly basis.
From 2013 to 2016 Mr Joubert and his wife rented a four bedroom two bathroom townhouse. Mr Joubert lived there with his family until moving to Singapore in July 2014. Mr Joubert said that after moving to Singapore, he kept some clothes and personal effects at the property where his family lived for use when he visited during the 2015 income year.
In August 2016 Mr Joubert and his wife entered a lease for a four-bedroom two bathroom detached house. In July 2017 they entered a residential lease for another property. The address shows that it is a unit. The evidence did not disclose the type of property or the accommodation it provides.
Mr Joubert owns a motor vehicle in Australia that is used by his wife.
He says that his wife and sons intend to remain in Australia until “the children have completed their schooling”. The youngest child will finish school in approximately 2023.
Mr Joubert and his wife considered moving the family to Singapore. There were two principle reasons they did not. First, schooling in Singapore is very expensive and secondly, the family had settled in very well in Perth and they did not want to uproot the family again.
Mr Joubert’s wife and sons visited him in Singapore in December 2015. The family stayed in a resort from 23 December 2015 to 27 December 2015.
Mr Joubert has a superannuation account in Australia to which he has not contributed since he became unemployed in August 2013. The statement for the 2015 tax year listed his family’s then Perth address. He maintained a private health insurance policy in Australia which listed the family’s Perth address. He said that was for the benefit of his wife and sons and he had not claimed on the policy. He had not advised Medicare or the Australian Electoral Commission that he is not a resident of Australia. He said that he did not know he was required to do so. He said that he had not claimed on Medicare since being in Singapore and had voted in a Federal Election in 2017 but was not aware whether he also voted in a Western Australia state election.
Mr Joubert and his wife have two joint bank accounts and an investment account in Australia. The latter contained $25,000 to $30,000. His reason for having that money in an Australian bank rather than a Singapore bank was because the interest rate was higher. He has not notified any Australian banks or other financial institution that he was a non-resident to have non-resident tax withheld. This was an oversight according to Mr Joubert.
Mr Joubert has had a credit card account with a Singaporean financial institution since at least July 2015 and a savings account since at least October 2017. The balance of the latter was SGD$9,000 on 16 August 2017 because he had just paid his annual Singapore tax bill.
During the 2015 tax year, Mr Joubert returned to Australia 25 times and was present in Australia for 141 days. His longest absence from Australia was 38 days. On each occasion he visited his family in Perth. On nine occasions he also went to Melbourne for work. He spent 98 days in Perth and 43 in Melbourne. He returned to Australia once every two weeks in the period 1 July to 31 December 2014. During the first half of 2015, he visited almost as frequently with some visits being longer than during 2014. The Tribunal accepts that was a consequence of his travelling to work in the Melbourne office.
In the 2016 tax year Mr Joubert returned to Australia 31 times and spent 201 days here. In the 2017 tax years he returned to Australia on 32 occasions and spent 203 days here. The Tribunal accepts that the higher number of visits was because he was expanding the Melbourne office.
In the 2018 tax year, Mr Joubert travelled to Australia for 99 days, 47 of which were spent in Melbourne and 52 in Perth with his family or in transit. In the five months from July 2018, he travelled to Australia for a total of 29 days, visiting his family only.
During the 2015 tax year, Mr Joubert generally used his Australian passport when travelling in and out of Australia. Sometimes he used his South African passport.
Mr Joubert’s employer wrote a letter dated 13 December 2017 stating that it had negotiated with him to allow him to forgo business class long haul tickets when flying direct to Melbourne and to use economy tickets so he could visit his family in Perth “on the way through”. Mr Joubert told the Tribunal the following. He was fortunate that his employer allowed him to do that. It realised his hardship. His sons were doing a lot at school and he missed a lot “living away”. He spent weekends with his wife and sons, with whom he has had a close and harmonious relationship since relocating to Singapore.
During the 2015 tax year, Mr Joubert completed passenger cards on entry to and exit from Australia. A random sample of 22 cards (11 outgoing and 11 incoming) were in evidence. He identified himself as an Australian resident, departing temporarily for business, or an Australian resident returning. On his incoming passenger cards he listed his family’s Perth address as his intended address in Australia and that he intended to live in Australia for the next 12 months, except once on 22 October 2014 when he listed a Melbourne address and indicated that he did not intend to live in Australia for the next 12 months. On that occasion he used his South African passport. He did not become an Australian citizen until November 2014.
On the outgoing passenger cards, Mr Joubert declared that he would be spending time in Singapore. On one card he specified that he would be in Singapore for business for 30 days and on the other cards his intended length of stay in Singapore for business ranged from 3 to 13 days. He specified “WA” as the state in which he lived on each outgoing passenger card.
Mr Joubert maintained that he had misinterpreted the questions and since it had been drawn to his attention, he has completed them correctly. He told the Tribunal that: he thought the address was for immigration purposes so that he could be contacted; it was not his intention to live in Australia but he was going to come to Australia during the next 12 months; his answers were not a statement of intent.
Mr Joubert has held a “Foreign Travel Sickness Insurance policy” since 16 October 2014. He has a life insurance policy that was taken out with a Singaporean company on 5 June 2015.
He was made redundant in 2019, remained in Singapore, and secured what his representative described as a new full-time long-term position.
At the end of October 2019, he had lived in Singapore longer than he had lived in Australia before taking up his position in Singapore.
The “ordinary concepts” test for deciding the residency status of an individual
The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of “resides”.
In Harding FFC, their Honours agreed with the reasoning and conclusion of Derrington J in Harding that Mr Harding was not a resident under that test.[4] They addressed the issue in response to the Commissioner’s Notice of Contention which challenged that finding.
[4] Harding FCC at [24].
Mr Harding had appealed against the finding that he did not have a permanent place of abode outside Australia under section 6(1)(i) of the ITAA 1936.
The following summary of the law about the “ordinary concepts test” is based on material set out in the Respondent’s Outline of Submissions in the substantive hearing and the decision in Harding FFC, referring to Harding. In Harding FFC, Davies and Steward JJ quoted what the learned primary judge had said at [31], stating that it was not disputed that the test of residence was correctly set out:
The ordinary meaning of the term “reside” is not, in itself, defined for the purposes of Australian Income Tax Law. That said, it is now well accepted the ordinary meaning of the word is that identified by Latham CJ in Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99-101. There, the Chief Justice considered that a person “resides” where they “lived” or where they keep house and do business and in doing so approved the observations in Levene v Inland Revenue Commissioners [1928]. The Chief Justice said:
I should have thought that there was no doubt that a man resided where he lived, and I do not think that there is any interpretation of the word “reside” by the courts which makes it impossible to apply the ordinary meaning of the word “reside” in the present case … [5]
[5] Justices Davies and Steward at [57].
In Iyengar v FCT, the Tribunal said:
The term “reside” is not defined in Australian income tax law and consequently it takes its ordinary meaning. The Macquarie Dictionary 5th Ed. (2009) defines “reside” as “to dwell permanently or for a considerable time; have one’s abode for a time”. Further, the New Shorter Oxford English Dictionary Vol.2 (1993) defines “reside” as meaning “b. Dwell permanently or for a considerable time, have one’s regular home in or at a particular place.[6]
[6] (2011) 85 ATR 924, [2011] AATA 856 at [54], referring to FCT v Miller (1946) 73 CLR 93 at 99-100 (Latham CJ). See also Harding v FCT [2018] FCA 837 at [31] (Derrington J); Re Dempsey and FCT (2014) 98 ATR 698, [2014] AATA 335 at [93].
A person may simultaneously be a resident in more than one place.[7]
[7] Harding [2018] FCA 837 at [32]-[33], [37], [39]; Dempsey (2014) 98 ATR 698, [2014] AATA 335 at [95], [99]; Joachim v FCT (2002) 50 ATR 1072 at 1074; Gregory v DFCT (WA) (1937) 57 CLR 774 at 777-778 (Dixon J).
As a general concept, residence includes two elements: physical presence in a particular place and the intention to treat the place as home; at least for the time being, not necessarily forever.[8]
[8] Hafza v Director-General of Social Security (1985) 6 FCR 444 at 449 (Wilcox J); Harding [2018] FCA 837 at [33].
The test has been expressed as follows: ‘whether the person has retained a continuity of association with the place ... together with an intention to return to that place and an attitude that that place remains “home”’.[9] The test is not concerned with where a person does business or holds business assets; rather, it is directed to the taxpayer’s personal circumstances, habits and way of life.[10]
[9] Hafza (1985) 6 FCR 444 at 449; Harding [2018] FCA 837 at [33].
[10] Harding [2018] FCA 837 at [37]-[38], referring to Koitaki Para Rubber Estates Ltd v FCT (1941) 64 CLR 241 at 249 (Williams J).
Once a person has established a home in a particular place (such as a locality in Australia), a person does not necessarily cease to be “resident” there because he or she is physically absent. Since residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as “home”, a change of intention may be decisive of the question whether residence in a particular place has been maintained.[11]
[11] Hafza (1985) 6 FCR 444 at 449-450; Harding [2018] FCA 837 at [32]-[33], [40].
The objective manifestation of a person’s intention is often a more accurate indicator of their state of mind at a particular time in the past than is an assertion about that alleged prior intent.[12]
[12] Harding [2018] FCA 837 at [43], [45].
The objective facts frequently taken into account in determining residency include physical presence; nationality; history of residence and movements; habits and “mode of life”; the frequency, regularity and duration of visits; the purpose of visits to or absences from a country; family and business ties with a country; and the maintenance of a place of abode in a country even when absent from that country.[13] The mere fact that the taxpayer’s visits to a country are of short duration does not of itself exclude residence in that country.[14] The location of an individual’s family can be decisive, even where the taxpayer is largely absent from the family home.[15]
[13] Harding [2018] FCA 837 at [46]; Iyengar (2011) 85 ATR 924, [2011] AATA 856 at [61]-[82]; Sneddon v FCT (2012) 89 ATR 739, [2012] AATA 516 at [45].
[14]Lysaght v Inland Revenue Commissioners (1928) 13 TC 511; Iyengar (2011) 85 ATR 924, [2011] AATA 856 at [73].
[15] Joachim (2002) 50 ATR 1072 at 1075, referring to 15 CTBR Case 56, Re Young (1875) 1 TC 57 and Rogers v Inland Revenue (1879) 1 TC 225.
The weight to be given to each factor will vary with the individual circumstances and no single factor is necessarily decisive.[16]
[16] Iyengar (2011) 85 ATR 924, [2011] AATA 856 at [60].
In his concurring decision in Harding FFC, Logan J observed:
Once the ambit of permanent place of abode outside Australia is understood, there is no great mystique about this aspect of taxation law, only the answering of a question of fact and degree in the overall circumstances of a given case. In the answering of that question, it is of cardinal importance not to elevate into matters of principle in a later case particular facts found decisive in the different circumstances of an earlier case.[17]
Did Mr Joubert reside in Australia in the 2015 income year according to the “ordinary concepts test”?
[17] At [8].
His representative argued that Mr Joubert’s circumstances “can be strongly aligned with the facts in Harding”, with the result that he was a non-resident of Australia for tax purposes. Each case has to be decided on its individual facts, and, as Logan J cautioned, “it is of cardinal importance not to elevate into matters of principle in a later case particular facts found decisive in the different circumstances of an earlier case”.
In Harding, Derrington J said:
Where a taxpayer maintains a home in Australia to which they regularly return to their spouse and family, it is an unusual case indeed that it can be said that they have ceased to be resident here. That would be particularly so in the case of a person who, for the first time, has ventured to live overseas.[18]
[18] At [50].
Derrington J found that the taxpayer’s circumstances in Harding were unusual.[19] In that case, his Honour found that Mr Harding had intended to leave Australia and live in the Middle East in 2009. The income year in contention was 2011.
[19] Harding at [51], [53], [59], [60], [84], [87].
In Harding FFC, Davies and Steward JJ said:
His Honour’s consideration of the objective connections with Australia, in our view disclose no discernible error of law. The quality and nature of those connections either supported a finding that Mr Harding was not a resident of Australia, or were insufficient to overcome the significance of Mr Harding’s intention to leave indefinitely.
The circumstances in this case are not “unusual”. The objective connections with Australia support a finding that Mr Joubert was a resident of Australia. The contemporaneous evidence of Mr Joubert’s intention, as discussed below, is consistent with those objective connections.
After being unemployed for ten months, Mr Joubert moved to Singapore in July 2014 in order to work and earn money to support his wife and sons in Australia. He became an Australian citizen in November of that year and generally used his Australian passport when entering and leaving Australia in the 2015 tax year. A decision was made when he accepted the position that his wife and sons would remain in Australia until at least 2023 when their sons would have finished their school education.
Mr Joubert emphasised that his wife and sons made a decision to remain in Australia and he made a decision to live and work in Singapore. The Tribunal found the emphasis on separate decisions unpersuasive and inconsistent with other evidence. As stated above, the primary reasons for Mr Joubert’s wife and sons not moving to Singapore was the cost of education and the desire not to uproot the family after they had settled in well in Perth after moving from South Africa. The Tribunal accepts that the decision to accept the job in Singapore was a very difficult one, “largely due to the fact that he had remained unemployed for 10 months and therefore the financial well-being of the family was a strong factor in driving the willingness to relocate and live long term away from his family”.
Mr Joubert contrasted his family’s moving premises in Perth twice after the 2015 tax year to his living in the one apartment since July 2014 to show that he had permanently relocated whereas they had moved. His relationship with his wife and sons is and has been harmonious since July 2014. He has returned regularly and frequently as his work has permitted. He commented that he missed a lot “living away”, that is, living away from his family in Perth. He has limited spare time in Singapore because of his work and travel, including returning to Perth to see his family.
The family’s home in Perth, in whatever premises, is the place which signifies Mr Joubert’s enduring continuity of association with Australia, to which he returned regularly and frequently.
Mr Joubert emphasised that he intended permanently relocating to Singapore when he commenced his job in July 2014. The Tribunal gives greater weight to the contemporaneous objective manifestation of his intention than to his more recent assertion of his intent in the 2015 tax year. His employment contract included a six month probation period. The Tribunal does not accept Mr Joubert’s assertion that he was confident from the beginning that his employment would continue beyond the probation period. The Tribunal accepts that he was hopeful the employment would continue after six months because of his previous 10 months of unemployment.
Mr Joubert had to live in Singapore to carry out his contractual obligations. His employer was the lessee of the apartment in Singapore where he lived until he renewed it as lessee in 2018. While Mr Joubert pointed to his long-term occupation of the one apartment to support his claim of permanent relocation, each of the leases could be terminated on two months’ notice and/or payment in lieu by the lessee, initially his employer. The lease he entered into as lessee in 2018 was entered into during the dispute with the ATO about his residence.
There was some dispute about the suitability of the apartment as a permanent home for the family. That was unhelpful because it was not in issue that Mr Joubert’s wife and possibly their sons, would not relocate until after 2023. The premises are suitable for Mr Joubert to occupy and for his family to stay briefly when they visit him until then. There was no reason to pay for larger premises which were not needed at that time.
Mr Joubert emphasised that he had substantially furnished the apartment. The Tribunal accepts that he has done so, noting the compact size of the apartment and the furnishing he has undertaken.
The information Mr Joubert provided in his passenger cards is consistent with regarding Perth as his residence. He did not change his answers until he became aware of the taxation issue relating to his residence. The questions are not ambiguous. The Tribunal gives little weight to his explanations for giving the answers he did. This is significant evidence of his intention to continue to reside in Australia in the 2015 income year.
Some emphasis was placed on Mr Joubert not having substantial assets in Australia apart from his superannuation account to which he had made no contributions since 2013. However, he has no substantial assets in Singapore either. There are the bank accounts in Singapore and Australia, the superannuation account in Australia, a motor vehicle in Australia used by his family, bank accounts in Australia and Singapore and personal possessions, including a pushbike in Singapore, and some personal possessions for his use when he returns to Australia.
Returning to Derrington J’s statement quoted at [66], and adapting it to this case, the taxpayer, for the first time, has ventured to live overseas apart from his family, and has maintained a home in Australia to which he regularly returns to his spouse and family. The evidence demonstrates that it cannot be said that he has ceased to be a resident here in the 2015 income year.
The totality of Mr Joubert’s circumstances show that he was a resident of Australia according to the “ordinary concepts test” during the 2015 tax year. It is therefore unnecessary to consider whether the Applicant was a resident under the “domicile" test.
The reviewable decision is affirmed.
I certify that the preceding 82 (eighty-two) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member
...........................[sgd].............................................
Associate
Dated: 3 August 2020
Date(s) of hearing: 6 December 2018 Advocate for the Applicant: Mr S Douglas, Australasian Taxation Services Pty Ltd Counsel for the Respondent: Mr L Livingston Solicitors for the Respondent: Australian Taxation Office
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