Tim Matthews and his wife Priya are New Zealand citizens but are currently living and working in Fiji. Tim is the corporate manager of one of the prominent banks in Fiji and Priya is the communications manager of the same bank. Their salaries, after deductions for income tax paid to Fiji Revenue and Customs are deposited in a bank account they have in Fiji. They own a house in Fiji in which they currently live as well as a house in Auckland which is currently occupied by their son and his wife. In addition, they own shares in several New Zealand and Australian companies. Any dividends they receive from these companies are deposited in their New Zealand bank account. They are away from New Zealand for more than 325 days and only come here once or twice each year to spend time with their son and his wife. They stay with their son and his wife when they are in New Zealand.

Required:

Tim and Priya seek your advice on their tax residency status. Explain to them whether they have a permanent place of abode (PPOA) in New Zealand and if so any tax implications. Support your answer with references to ITA 2007 and appropriate case law.