Case No 104

(1943) 10 TBRD 299

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(Judgment by: )

Case No. 104

Court:

Judge:
Unknown

Judgment date: 1943

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Judgment by:

Whether taxpayer was a resident of Australia - Income received from sources outside Australia - Income Tax Assessment Acts 1936-1940 and 1936-1941, Section 23(r).

The taxpayer claimed that in the years ended 30th June, 1940, and 1941, he was a "non-resident" and therefore was not assessable on income derived by him from ex-Australian sources. The Commissioner regarded him as a ' resident of Australia" and therefore assessed him to tax on the total amount of income derived by him in each of the years in question.

The taxpayer was born in New Zealand and left there in 1909 for England where he established a home in which he resided with his mother and sisters, who arrived shortly after he did. He remained there until 1912 when he went to the East to engage in rubber, coco-nut and coffee production, with a view to making enough money to retire to England. When on leave of absence he usually, went to England but sometimes he came to Australia to see relations of his wife, who was born here.

When the taxpayer retired from business (1939) his ·wife was temporarily in Australia. It had been his intention that she should join him and go with him to England upon his retirement, but because he was informed that it would be cheaper to go via Australia he decided to do so and, after spending a few months here, to go with his wife to England whither he had sent all his chattels.

The taxpayer arrived in Australia on the 6th September, 1939 - three days after war was declared. He never acquired a residence of his own in this country. He remained here because of the war-time difficulty of getting to England.

The taxpayer was still paying his subscription to two London clubs and he had done various things which left no doubt whatever that it was his intention to go to England, and live there permanently, as soon as the impediment of war-time circumstances was removed.

The taxpayer had considerable investments in England, the East and Australia - the quantitative proportions being roughly 4, 3 and 2 respectively.

The findings of the Board were -

(1)

that the taxpayer was a "resident of Australia" in each of the periods mentioned;

(2)

that the assessment for the income year ended 30th June, 1940, should be amended by the elimination of income derived by him from ex-Australian sources prior to 6th September, 1939 (when he was a "non-resident"); and

(3)

that the assessment for the income year ended 30th June, 1941, should be confirmed.

One member stated his reasons for these findings as follows: -

"In my opinion, the facts make it clear that the taxpayer has resided in Australia since he came here on the 6th September, 1939. No other finding seems possible in view of the fact that, since then, he has lived here continuously and, therefore, has certainly resided nowhere else. There may be some confirmed wanderers in the world of whom it might be said that they do not reside in any place or country for any appreciable length of time, but this cannot be said of the taxpayer so far as his sojourn in Australia is concerned. Despite the varying senses which have been acquired by the substantives and adjectives of the same derivation, I do not think that there has ever been any doubt that the verb 'resides' ordinarily denotes 'the place where an individual eats, drinks and sleeps, or where his family and servants eat, drink and sleep' (Wharton's Law Lexicon, J 4th Ed.). The established intention of the taxpayer: to go to England as soon as practicable for the purpose of residing there permanently may have a bearing on his domicile but that is a matter which need not be considered if - as I find - the fact is that the taxpayer has resided in Australia since he came here in 1939.

As the taxpayer only became a resident on the 6th September, 1939, any income derived by him before then from sources wholly ,outside Australia was derived by him as a non-resident and is therefore exempt from tax (Section 23(r))."

The other members of the Board said -

"Taxpayer's intention to make a permanent home in England was stressed by his representative and he cited Gregory v. Deputy Federal Commissioner of Taxation, (1937) 57 CLR 774; 4 ATD·397, where it was held that a taxpayer may be a resident of the Northern Territory although he retains a residence in some other part of the Commonwealth. The appellant in that case had resided only 131 (or 113) days in Darwin and the remarks of Dixon J. make it clear that the decision depended entirely on the facts. There is nothing in that case (or any other known to us) which .says or suggests that a person's intentions can override, the facts so far as residence is concerned.

In our opinion, whether or not the taxpayer intended to remain in Australia for a brief period only is immaterial. Residence is a question of fact. That the taxpayer was a 'resident of Australia' during the year ended 30th June, 1940, is, we think, established beyond question. Even if we had been deciding the matter at that date we would have found accordingly. At this stage and in the light of events we have no hesitation in rejecting the claim in respect of the year mentioned. It follows as a necessary consequence that the claim in respect of the year ended 30th June, 1941, must also be rejected.

The taxpayer was a 'resident of Australia' during the year ended 30th June, 1940, but not during the whole of that year. He did not become a 'resident of Australia' until 6th September, 1939, and in view of the provisions of Section 23(r) he cannot be assessed in respect of income previously received."

Claim allowed in part in respect of one year. 47-48/1943 (J.104/74).