Q1

Mr Cherrygate is employed by Bank of Australia Ltd, an Australian resident company, and was sent by his employer to Vanuatu to open a new branch office. This employment transfer is on a "no tax detriment" condition that the bank would pay any additional income tax payable (if any) by Mr Cherrygate on his bank salary as a result of him working in Vanuatu, and having to pay any income tax there in addition to any income tax payable by him in Australia on that salary. Mr Cherrygate left Australia on 1 July 2019 accompanied by his wife. Shortly after arriving in Vila they moved into a rented house under a 12 month lease with an option to renew for a further 12 months. Mr Cherrygate obtained a residency permit for 12 months that was later renewed for a further 2 years. He did not own a house in Australia and gave up the lease of a flat in Sydney before leaving. He left no assets in Australia but retained his membership of a hospital fund. It was always intended by Mr Cherrygate and his employer that he would return to Australia after an indefinite period of time. The actual period was not specified but it was anticipated that it would be of substantial length. After being away for 23 months, Mr Cherrygate returned to Australia at the end of May 2021 because of ill health. Bank of Australia Ltd wants to confirm whether or not Mr Cherrygate remained an Australian resident after he left Australia to determine whether he had to pay Australian income tax while working in Vanuatu. Advise the bank on the basis that Mr Cherrygate did not change his Australian domicile when he left Australia. (Refer to the attachment for further guidance on how to determine whether a "place of abode" outside Australia is "permanent".)

Determining whether a "place of abode" outside Australia is "permanent" "Place of abode" outside Australia "Place of abode" is not defined in the Income Tax Assessment Acts. R v Hammond (1852) ER 1447 at 1480: "A man's residence, where he lives with his family and sleeps at night, is always his place of abode." In Harding v FCT [2019] FCFCA 29 the Full Federal Court held that "place of abode" refers not only to a dwelling but can also refer to a country. Place of abode is "permanent" "Permanent" is also not defined in the in the Income Tax Assessment Acts. The Macquarie Dictionary: "lasting ... indefinitely; remaining unchanged; not temporary;" FCT v Applegate 79 ATC 4307 Held: Whether a place of abode is "permanent" is a question of fact. Also, the word "permanent" does not have its ordinary meaning of "everlasting" or "forever". But it must be contrasted with "temporary or transitory". A "permanent" place of abode therefore does not have to be everlasting, but it must be more than a temporary or transitory place of abode. Relevant factors to determine place of abode is "permanent" Intention as to length of stay outside Australia Actual length of stay outside Australia Abandonment of "place of abode" in Australia Acquisition of "place of abode" outside Australia Intention to make that "place of abode" home Nature and quality of use made of that "place of abode" Duration and continuity of presence in the place outside Australia "Durability of association" (ties) with that place Some factors may point in one direction and some in the other. The relevant factors must weighed up and balanced. In this process, the weight of each factor may vary from case to case and some factors may dominate others depending on the circumstances. Ultimately, the outcome may therefore turn on questions of degree. Importantly, no single factor is always decisive in every case