Case P38

Judges: MB Hogan Ch

P Gerber M
GW Beck M

Court:
No. 3 Board of Review

Judgment date: 7 May 1982.

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Dr. P. Gerber (Member)

In this reference, the taxpayer, an officer of an Australian banking corporation with a long history of wanderlust, was appointed to that bank's branch office in the New Hebrides. The appointment was for one year. It suited taxpayer's purposes; he had few family ties in Australia and preferred living abroad. When he sought information as to whether the appointment could be extended, ``I was given the lukewarm impression in Melbourne that it would be possible to go over that - this was just in general conversation with the area manager for the Pacific'' (p. 6). He arrived in Vila on 18 August and immediately took up his appointment.

2. The sole issue before the Board is whether an amount of $10,545, being the taxpayer's wages earned and paid to him in Vila between August 1978 and the end of that financial year are exempt from Australian income tax on the basis that the taxpayer had acquired a ``permanent'' place of abode outside Australia during the relevant period as that term has been judicially interpreted for purposes of sec. 6(1)(a)(i).

3. In Case N81,
81 ATC 414 , I took the opportunity of reviewing the recent authorities on this point and concluded:

``In summary, I am satisfied that whether or not a taxpayer has acquired a `permanent' place of abode outside Australia for purposes of sec. 6(1)(a)(i) is one of objective fact where the `taxpayer's intent as to the length of his stay is no more than a relevant factor to be considered'. It is a relieving provision which exempts those Australian domiciliaries from Australian tax who go abroad for an indefinite period notwithstanding an intention, ultimately to return to this country.''

(81 ATC at p. 417.)

My colleague, Dr. Beck, reached a similar conclusion.

4. The matter went on appeal and was heard by Sheahan J. ( sub nom. F.C. of T. v. Jenkins ) of the Supreme Court of Queensland, reported in 82 ATC 4098. The Commissioner's appeal was dismissed, his Honour concluding that the Board had not been in error. In Jenkins, the evidence disclosed that the taxpayer had not at any material time an intention to remain indefinitely in Vila. He had gone there for a three year term and, as found by Sheahan J.,

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ATC 180

``had not given any consideration to prolonging his stay there beyond that period''. This notwithstanding, his Honour concluded that this did not make the taxpayer's stay ``temporary'' in contradistinction to ``permanent'' for purposes of sec. 6(1)(a)(i).

5. I am only here concerned with the period 18 August 1978 to 30 June 1979. I accept the evidence of the taxpayer that shortly after his arrival in Vila, he decided to make the New Hebrides his permanent home (his matrimonial intentions and subsequent activities have been usefully summarized in Dr. Beck's decision). Indeed, were it necessary for this decision, I am satisfied that during the relevant period, this taxpayer had abandoned his Australian domicile of origin and acquired a New Hebrides domicile of choice.

6. I would uphold the taxpayer's objection and direct that the amount of $10,545 be deleted from his assessable income for the 1979 tax year.