Sneddon v FC of T

Members:
CR Walsh SM

Tribunal:
Administrative Appeals Tribunal, Perth

MEDIA NEUTRAL CITATION: [2012] AATA 516

Decision date: 6 August 2012

---

C R Walsh (Senior Member)

INTRODUCTION

1. Mr Sneddon seeks a review of the Commissioner's objection decision (dated 1 September 2011) to disallow Mr Sneddon's objection (dated 4 August 2011) against an income tax assessment for the amount of $52,030.55 (issued on 2 June 2011) in respect of income derived by him whilst employed as a Health, Safety and Environment ( HSE ) Supervisor for Fluor Australia Pty Ltd ( Fluor ) in Qatar, United Arab Emirates ( UAE ) in the income year ended 30 June 2009.

2. The central issue in dispute, and for consideration by the Tribunal, is whether Mr Sneddon was an Australian "resident" taxpayer in income year ended 30 June 2009. If "yes", Mr Sneddon is subject to Australian income tax on his worldwide income, including the foreign source income he derived whilst employed at Fluor in Qatar, UAE (which income was not subject to tax in the UAE and is therefore not exempt from Australian income tax pursuant to section 23AG of the Income Tax Assessment Act 1936 ( ITAA 1936 )). If "no", then no Australian tax is payable by Mr Sneddon on that foreign source income. This is a question of fact and degree:
Federal Commissioner of Taxation v Miller [1946] HCA 23; (1946) 73 CLR 93.

RELEVANT FACTS & EVIDENCE

3. Mr Sneddon was born in Australia in 1959 and is an Australian citizen.

4. Before July 2007 Mr Sneddon was in a de facto relationship with Ms Julie Harris. Mr Sneddon and Ms Harris jointly owned an investment property and jointly held a National Australia Bank ( NAB ) account (Account No 79-441-7691) at a Perth branch of NAB ( Joint Account ).

5. In July 2007 Mr Sneddon's de facto relationship with Ms Harris ended, after which he moved into rent-free accommodation with friends.

6. In December 2007 Mr Sneddon and Ms Harris sold their jointly owned investment property. Between about July 2007 and February 2011 Mr Sneddon operated the Joint Account. In February 2011, Mr Sneddon and Ms Harris closed the Joint Account.

7. In about December 2007 Mr Sneddon purchased a property at Lot 400 Stevenson Place, Byford, Western Australia ( Byford Property ). The Byford Property is mortgaged to NAB.

8. On 1 March 2008 Mr Sneddon resigned from his employment with Western Constructions with the intention of having a 3 month break from working to renovate the Byford Property.

9. Settlement on the Byford Property occurred on 8 March 2008. According to Mr Sneddon, he began renovations to the Byford Property immediately upon taking possession of it.

10. On about 15 March 2008 Mr Sneddon was contacted by Fluor regarding him working in Qatar, UAE and a series of interviews followed.

11. By letter dated 15 April 2008, Fluor offered Mr Sneddon employment as a "HSE Supervisor". Enclosed under cover of that letter was an Employment Agreement between Fluor and Mr Sneddon, signed by Fluor on 15 April 2008 ( Fluor Employment Agreement ). Mr Sneddon signed and accepted the Fluor Employment Agreement on 16 April 2008.

12. Under the heading "2. General Summary" the Fluor Employment Agreement provides, in part:

"Position Title	HSE Supervisor
Generic classification	HSE Supervisor 1
………
Business Unit	HSE Australia
…….
Point of Hire	Perth
Employment Base	Qatar
Commencement Date	16 April 2008
Employment States	Project Hire "

13. No mention is made in the Fluor Employment Agreement of when Mr Sneddon's employment with Fluor as a HSE Supervisor was to cease. However, a letter from Mr Dwayne Strydom, Director, Site Services and Administration, Fluor to Commercial Bank of Qatar, dated 11 July 2010, provides:

"This letter serves to confirm that Mr Allan Russell Sneddon , holder of Australian Passport No. [….] (Resident Permit No. 25903600093) is employed by Fluor Mideast Limited in the capacity of HSE Superintendent. Mr Sneddon commenced employment on 17 April 2008, with an anticipated completion date of 31 July 2010 ." [Emphasis added]

14. According to Mr Sneddon, he was employed by Fluor specifically to work as a HSE Supervisor on the "Qatar Gas Berth 6 Project" ( Berth 6 Project ). Mr Sneddon stated that he accepted Fluor's employment offer to "consolidate his career aspirations" as "the Middle East is recognised for being the centre of 'Oil and Gas' and Fluor is recognised as a market leader" and because "Australia does not offer the same opportunity" for him to achieve his career goals. However, there was no evidence to support these claims.

15. Further, Mr Sneddon claimed that in his discussions with Fluor they indicated to him that if he accepted employment with them on the Berth 6 Project he could expect to continue working with them in the future, after the completion of the Berth 6 Project, on one of their many other Middle East projects. However, there was no evidence before the Tribunal to substantiate this.

16. Mr Sneddon was issued with a UAE residence permit and a work visa by the State of Qatar, Ministry of Interior, both arranged by Fluor.

17. Mr Sneddon relocated to Qatar, UAE on 16 April 2008 and commenced work with Fluor on 17 April 2008. Mr Sneddon had never been overseas before this.

18. According to Mr Sneddon, as he had never left Australia before going to Qatar and was unfamiliar with immigration requirements, he ticked the "leaving temporarily" box instead of the "leaving permanently" box on his departure card. He believed that to tick "leaving permanently" meant to leave Australia without the intent to ever return, even on vacation. Whereas, he interpreted "leaving temporarily" to mean to leave Australia, but with the intent to return here on vacation. However, there was no evidence to corroborate this.

19. From the date of settlement of the Byford Property (on 8 March 2008) to when Mr Sneddon left Australia for Qatar (on 16 April 2008), Mr Sneddon lived in and commenced renovations on the Byford Property. He said that he slept in the "ensuite bedroom end of the house". At the time Mr Sneddon left Australia for Qatar he said that he had completed the external, but not internal, renovations of the Byford Property. As such, the Byford Property was unable to be rented.

20. Mr Sneddon left certain personal items at the Byford Property when he left for Qatar, including two beds and mattresses, a lounge, a refrigerator, some "basic" kitchen items (e.g. a toaster, a kettle, a couple of plates and some cutlery) and a car (which he stored at the Byford Property). According to Mr Sneddon, what he left at the Byford Property were the "bare essentials" and that the Byford Property was not a comfortable place to live. At the time Mr Sneddon left Australia, the car was being financed by way of an Australian car loan.

21. Before leaving Australia for Qatar, Mr Sneddon had his mail redirected from the Byford Property to a PO Box. He did this as he did not consider that a mail redirection to Qatar would be reliable. Mr Sneddon said that his friend, "Alf", collected the mail for him and that Alf would open anything that looked urgent or important (e.g. bills, bank documents etc.) and would scan and e-mail them to him in Qatar. The rest of the mail was collected by Alf and kept by him awaiting Mr Sneddon's return to Australia.

22. Upon his arrival in Qatar on 16 April 2008, Mr Sneddon lived in a fully-furnished apartment (Apartment 1003, Gulf Resident Apartment Suites, Al Istiqlal Street, Doha, Qatar) which had been arranged and was rented by Fluor from a local company ( Fluor Apartment ). Mr Sneddon resided in the Fluor Apartment from April 2008 to December 2009 (i.e. for the whole income year ended 30 June 2009). Mr Sneddon's recollection was that he had to pay for his food, fuel and phone, but other utilities (such as gas, power, water etc.) were paid for by Fluor. Fluor also covered Mr Sneddon's insurance costs.

23. Mr Sneddon took various personal items with him from Australia to Qatar, including all his clothes, a guitar, a computer and various bank account and loan documents.

24. Mr Sneddon lived alone in the Fluor Apartment from the time he arrived in Qatar (i.e. 16 April 2008) until June 2009, when he was joined by his then partner (now wife) Ms Shirley Welch. Mr Sneddon had started a relationship with Ms Welch in Australia before moving to Qatar. Mr Sneddon said that in June 2008 he asked Ms Welch if she would move to Qatar so that they could develop their relationship further. Ms Sneddon commented that Ms Welch visited him in Qatar twice (once in June 2008 and again in March 2009) before deciding to move there to live with him.

25. In December 2009 (i.e. after the 30 June 2009 income year) Mr Sneddon and Ms Welch leased a different apartment (at Zig Zag Tower B, Apartment 2001A, Lagoon Plaza, Doha, Qatar) independently at their own expense.

26. Mr Sneddon told the Tribunal that he received a "travel allowance" from Fluor equivalent to a return economy flight to Perth (being his "Point of Hire") but that he did not necessarily have to use that allowance on a return trip to Perth. His arrangement with Fluor was that after 12 weeks' work he was entitled to 21 days of leave and the return airfare. He said that he would apply for leave and, once approved, the travel allowance (equivalent to a return economy flight to Perth) would automatically be deposited into his bank account.

27. In the income year ended 30 June 2009, Mr Sneddon returned to Australia on 3 occasions for a total of approximately 7½ weeks, comprising:

• • 2 weeks (from 18 July 2008 to 31 July 2008);
• • 3 weeks (from 30 January 2009 to 20 February 2009); and
• • 2½ weeks (from 15 April 2009 to 2 May 2009).

28. On each occasion that Mr Sneddon returned to Australia he recorded the Byford Property as his intended address in Australia on his incoming passenger card (for immigration purposes). However, in his "Statement of Facts, Issues and Contentions" (dated 26 July 2012) and in his evidence before the Tribunal Mr Sneddon stated that on the first occasion he returned to Australia from Qatar (i.e. from 18 July 2008 to 31 July 2008) he flew directly from Qatar to Melbourne (to attend a reunion of his ex-Victorian police colleagues) and that he passed through Perth, prior his return to Qatar, to check on the progress of the renovations to the Byford Property. On the second occasion he returned to Australia (i.e. from 30 January 2009 to 20 February 2009), Mr Sneddon recounted that he travelled to Perth specifically to open a new bank account and to close the Joint Account (that he held with his former partner Ms Harris) and other unused credit cards (e.g. his ANZ credit card). On the third occasion he returned to Australia (i.e. from 15 April 2009 to 2 May 2009), Mr Sneddon said that he travelled to Perth specifically to assist Ms Welch finalise her departure from Australia. However, there was no evidence (e.g. copies of airline tickets etc.) to support this. In his "Statement of Facts, Issues and Contentions" (dated 26 July 2012) Mr Sneddon also states that in the year ended 30 June 2009 he took two vacations to places other than Australia, namely 3 weeks in the United States of America and 3 weeks in Abu Dhabi, respectively. There was no evidence of this.

29. In support of his review application (dated 24 October 2011) Mr Sneddon stated that, during the income year ended 30 June 2009, whilst he never rented out the Byford Property he had friends who worked on a fly in, fly out basis who stayed at the Byford Property when they needed to but "they never stayed there longer than 1-2 days at a time." However, in his "Statement of Facts, Issues and Contentions", Mr Sneddon states that:

"The property was secured with deadbolts and windows locked up. Local police and neighbo[u]rs (sic.) were advised the property was un-inhabited with an unknown return date. The front gate was shut and locked with a high security chain and lock."

30. During the income year ended 30 June 2009, Mr Sneddon's income from his employment with Fluor was deposited into the Joint Account in Australian dollars. An undated Australian Taxation Office questionnaire titled "Permanent Place of Abode" ( ATO Questionnaire ), completed by Mr Sneddon, shows the total amount deposited into the Joint Account in the 30 June 2009 income tax year was AUD $224,660.11. The ATO Questionnaire also shows that Mr Sneddon used his Fluor employment earnings for the following purposes:

• • To pay the mortgage of the Byford Property;
• • To make repayments on his Australian car loan;
• • To make repayments on his Australian loan on the purchase of a lap-top computer;
• • To pay house insurance on the Byford Property;
• • To pay car insurance on the car stored at the Byford Property;
• • To cover the renovation costs of the Byford Property;
• • To pay overseas telephone expenses and telephone expenses for the Byford Property Telstra Bigpond account;
• • To pay personal living expenses whilst in Qatar;
• • To pay personal living expenses whilst on leave from Fluor in Australia;
• • To pay credit card debts, including a credit card held with the ANZ Bank; and
• • To purchase personal items whilst in Qatar (e.g. kitchen equipment, soft furnishings, music equipment etc.).

31. Australian Government "AUSTRAC" computer records show that at least AUD $161,113.00 was transferred from the UAE to various pre-existing Australian bank accounts held by Mr Sneddon.

32. Mr Sneddon's "Statement of Facts, Issues and Contentions" (dated 26 July 2012) provides that the monies transferred from Qatar to Australia during the year ended 30 June 2009 were apportioned by Mr Sneddon as follows:

• "28. 45 % to pay the mortgage on the Byford property.
• 29. 16% to meet Australian expenses comprised of:
  • a. 7% to pay pre-existing loans (car and computer)
  • b. 5% to maintain the Byford property (rates, insurance) and pay off external renovations that were started prior to mobilization
  • c. 0.3% to pay for Australian living expenses which were limited to Bigpond internet and telephone account (note the Applicant's personal email address had been held by the Applicant for approx. 11 years and was known by all his personal and professional contacts and hence could not be disconnected. To close the bigpond account meant the Applicant would have to change his email address set-up
  • d. 4% was spent on leave while in Australia - split between Perth, VIC and NSW
• 30. 39% was spent on living expenses in Qatar to establish his residence there; phone bills, fuel, food, apartment expenses and entertainment…….Furniture and household items purchased in Qatar included:
  • a. TV
  • b. Lounge
  • c. Bed linen, manchester
  • d. Floor Rugs
  • e. Kitchen equipment - plates, cutlery, cooking tools, dishes and pans, food processor, kettle, glasses
  • f. Clothes and footwear
  • g. Sporting equipment
  • h. Musical instruments: a keyboard, a second guitar, an amplifier and foot pedal
  • i. Wall pictures, mirrors
  • j. Souvenir ornaments and art[e]facts (sic.)
  • k. Potted plants"

There was no contemporaneous evidence before the Tribunal to substantiate how much Mr Sneddon spent on living expenses in Qatar in the relevant income year.

33. Further, in the income year ended 30 June 2009 Fluor contributed AUD $12,320.00 to an ING Australian superannuation fund account (opened on 1 July 2008) of which Mr Sneddon was a member.

34. Whilst living in Qatar (during the income year ended 30 June 2009) Mr Sneddon maintained a Telstra Bigpond telephone line and internet connection to the Byford Property. Further, during his return trips to Australia in the income year ended 30 June 2009, Mr Sneddon drove his car (that was stored at the Byford Property).

35. According to Mr Sneddon, in June 2010 he chose to improve his employment conditions in Qatar and met with alternative employers. A letter from Mr Michael O'Kane, Operations Manager, Brunei Oil & Gas Services W.L.L. (dated 15 December 2011) states, in part:

"I wish to confirm that Brunei Energy Qatar made a formal offer of employment to Allan Sneddon [on] (sic) behalf of one of our local clients. The offer was made on Sunday 19 June 2010 and was for the position of Senior HSE Advisor on an ongoing indefinite contract basis in Qatar. The commencement date was due to have been early August 2010."

36. Mr Sneddon's employment with Fluor ended on 29 July 2010.

37. Mr Sneddon returned to Australia on 1 August 2010 where he remained until 19 September 2011 (i.e. more than 12 months). Mr Sneddon claims that he returned to Australia at this time as he was having some problems in his relationship with Ms Welch and he decided that they would both benefit from some time apart, some "space", to resolve their problems. However, Mr Sneddon claims that it was his intent to return to the Middle East. There was no evidence to support this.

38. Mr Sneddon's "Statement of Facts, Issues and Contentions" (dated 26 July 2012) provides that he and Ms Welch moved to Dubai, UAE in September 2011 and that all of their household and personal items were shipped from Qatar to Dubai. Mr Sneddon told the Tribunal that his intention is to continue to live and further his career in the Middle East and to keep the Byford Property (which is currently rented) as an investment property. Mr Sneddon did not comment on whether his intention is to ultimately retire in the Middle East.

RELEVANT LAW & ANALYSIS

39. An "Australian resident" individual is generally assessable on ordinary and statutory income derived from all 'sources', whether in or out of Australia, during the income year (i.e. on his or her 'worldwide' income): sections 6-5(2) and 6-10(4) of the Income Tax Assessment Act 1997 ( ITAA 1997 ). In contrast, a "foreign resident" is generally assessable only on ordinary and statutory income derived from all Australian 'sources', during the relevant income year: sections 6-5(3) and 6-10(5) of the ITAA 1997. Employment earnings constitute 'ordinary' income for this purpose.

40. The definition of "Australian resident" in section 995-1 of the ITAA 1997 provides that "Australian resident" means a person who is a resident of Australia for the purposes of the ITAA 1936. The definition of "foreign resident" in section 995-1 of the ITAA 1997 states that a "foreign resident" means a person who is not a resident of Australia for the purposes of the ITAA 1936. In other words, the definition of "Australian resident" and "foreign resident" in the ITAA 1997 both cross-reference back the definition of "resident" or "resident of Australia" in section 6(1) of the ITAA 1936.

41. The definition of "resident" or "resident of Australia" in section 6(1) of the ITAA 1936 includes not only a person who "resides" in Australia within the ordinary meaning of that word (commonly referred to as the 'ordinary concepts test'), but also a person who satisfies any one of three additional statutory tests set out in section 6(1)(a)(i) to (iii) of the ITAA 1936, comprising:

• (i) the domicile test;
• (ii) the 183 day test; and
• (iii) the superannuation fund test.

42. Thus, 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" (under the "ordinary concepts test"). Whether Mr Sneddon was an Australian resident according to ordinary concepts in the income tax year ended 30 June 2009 is considered in [44] to [50] below.

43. The three statutory tests in section 6(1)(a)(i) to (iii) of the ITAA 1936 effectively enlarge the group of individuals who are liable to pay Australian income tax in an income tax year, even though they may not physically reside in Australia in that year:
Federal Commissioner of Taxation v Applegate 79 ATC 4307 at 4313 per Northop J. Of the three statutory tests, only the "domicile test" in section 6(1)(a)(i) of the 1936 ITAA 1936 is relevant to this application. That test is considered briefly later in these reasons.

Was Mr Sneddon an Australian resident according to the 'ordinary concepts test' in the income year ended 30 June 2009?

44. Whether an individual is an Australian resident according to ordinary concepts is a question of fact and degree: Miller. Since the term "resides" is not defined in the Australian income tax legislation it takes its ordinary meaning. A lengthy discussion of law on residency according to the "ordinary concepts test" is set out in an earlier decision of the Tribunal: see
Iyengar and Commissioner of Taxation [2011] AATA 856.

45. Although the question of whether an individual is an Australian resident according to ordinary concepts in a particular income tax year is a question of fact and degree, the courts and the Tribunal have generally taken into account the following 8 factors in considering this question:

• • Physical presence in Australia;
• • Nationality;
• • History of residence and movements;
• • Habits and "mode of life";
• • Frequency, regularity and duration of visits to Australia;
• • Purpose of visits to or absences from Australia;
• • Family and business ties with Australia compared to the foreign country concerned; and
• • Maintenance of a place of abode.

A summary of the law on each of the above factors is contained in the Tribunal's decision in Iyengar. No single factor is determinative and the weight to be afforded to each factor depends on the circumstances of the individual taxpayer concerned:
Shand v Federal Commissioner of Taxation 2003 ATC 2080 at [35].

46. Based on the facts and evidence before the Tribunal, Mr Sneddon's particular circumstances in the income year ended 30 June 2009, may be summarised as follows:

• • Physical presence in Australia - In the income year ended 30 June 2009, Mr Sneddon was physically present in Australia for a total of approximately 7 1/2 weeks (out of a 52). In March 2008 Mr Sneddon purchased a property in Australia (being the Byford Property) and retained that property throughout the income year ended 30 June 2009. On his 3 return trips to Australia, Mr Sneddon recorded the Byford Property as his intended address in Australia on his incoming passenger cards for immigration purposes. Mr Sneddon left personal items at the Byford Property during the income year concerned, including various household items and a car. He also retained his Telstra Bigpond internet and telephone account at the Byford Property. In the relevant income year, Mr Sneddon retained bank accounts in Australia and his membership in an Australian superannuation fund. Mr Sneddon's employment earnings from Fluor during the income year ended 30 June 2009 were paid by Fluor in Australian dollars into Mr Sneddon's Australian bank account (being the Joint Account he then held with Ms Harris). More than half of those earnings were, by Mr Sneddon's own admission, used to cover expenses in Australia, including expenses associated with his main Australian asset, the Byford Property (such as the mortgage, rates, taxes, renovations, Bigpond internet and telephone account) and to pay down his pre-existing Australian car and computer loans. Further, Fluor made superannuation contributions, on Mr Sneddon's behalf, to his Australian superannuation fund during the year ended 30 June 2009.
• • Nationality - Ms Sneddon was born in Australia in 1959 and in the income year ended 30 June 2009 he was (and is currently) an Australian citizen.
• • History of residence and movements - Prior to his departure from Australia on 16 April 2008 to commence employment with Fluor in Qatar Mr Sneddon had never been overseas (i.e. he had always resided in Australia).
• • Habits and "mode of life " - Throughout the entire income year ended 30 June 2009, Mr Sneddon lived in a fully-furnished apartment leased by Fluor from a local Qatar company. The evidence before the Tribunal was that, in that income year, Mr Sneddon's only expenses in Qatar were his food, phone, fuel and some furniture and household items that he purchased to make the fully-furnished apartment, provided by Fluor, more comfortable. All other Qatar living expenses were paid by Fluor. Further, Mr Sneddon's Fluor employment income in the income year ended 30 June 2009 was paid in Australian dollars into an Australian bank account and predominantly used to meet his Australian obligations, including his mortgage, rates, taxes, internet and telephone account, car loan and computer loan.
• • Frequency, regularity and duration of visits to Australia - In the year ended 30 June 2009, Mr Sneddon spent a total of approximately 7 1/2 weeks (out of 52) in Australia on 3 separate trips.
• • Purpose of visits to or absences from Australia - According to Mr Sneddon's "Statement of Facts, Issues and Contentions" (dated 26 July 2012), Mr Sneddon returned to Australia on 3 separate occasions during the year ended 30 June 2009 for the following reasons: (i) to attend a reunion in Melbourne and then to Perth to check on the progress of the renovations to the Byford Property; (ii) to open a new bank account in Perth and close the Joint Account he then held with Ms Harris; and (iii) to help Ms Welch finalise her departure from Perth to Qatar. Based on the evidence before the Tribunal, Mr Sneddon's main reason for going to Qatar in the income year ended 30 June 2009 was to work for Fluor on the Berth 6 Project as an HSE Supervisor (on "Project Hire") commencing 16 April 2008 with an "anticipated completion date of 31 July 2010". Mr Sneddon had an expectation that Fluor would employ him on some other project at the completion of the Berth 6 Project but there was no evidence before the Tribunal that Fluor made any promises to Mr Sneddon regarding his future employment with them. In his "Statement of Facts, Issues and Contentions" (dated 26 July 2012) Mr Sneddon states that in the year ended 30 June 2009 he also took two vacations to places other than Australia, namely 3 weeks in the United States of America and 3 weeks in Abu Dhabi, respectively. There was no evidence to support this.
• • Family and business ties with Australia compared to Qatar, UAE - Based on the evidence before the Tribunal, all of Mr Sneddon's personal ties were with Australia during the income year ended 30 June 2009. His only tie with Qatar, during that income year, was his employment with Fluor as a HSE Supervisor on the Berth 6 Project.
• • Maintenance of a place of abode - At all times during the income tax year concerned, Mr Sneddon retained the Byford Property. Mr Sneddon purchased and settled on the Byford Property before being offered and accepting employment with Fluor in Qatar. Mr Sneddon took possession of the Byford Property immediately upon settlement and commenced renovations on it. That is, at the time of purchasing, settling on and taking possession of the Byford Property it was not Mr Sneddon's intention to move to Qatar and work. The Fluor job offer and his decision to accept it and move to Qatar came later. His intention at the time of purchasing, settling on and taking possession of the Byford Property was to live in and renovate the Byford Property. At no time during the year ended 30 June 2009, did Mr Sneddon rent out the Byford Property or sell his car (which was stored at the Byford Property). To the contrary, Mr Sneddon lived at the Byford Property and drove his car (stored at the Byford Property) when he returned to Perth from Qatar during the year ended 30 June 2009. He also maintained his Telstra Bigpond internet and telephone account at the Byford Property during that income year and set up a PO Box for his mail (which his friend collected) rather than redirecting it to the Fluor Apartment in Qatar. Mr Sneddon continues to own and currently rents out the Byford Property.

47. Questions of 'residence' can be difficult since, as mentioned, what is required is a weighing of the facts in a particular case. In
Shand v Federal Commissioner of Taxation 2003 ATC 2080 the Tribunal commented at [35] that "…questions of residence……, have frequently been found by the courts to be difficult to assess on a factual level and not easy to define in concrete legal terms." The Tribunal acknowledges that Mr Sneddon's application is no exception.

48. In his "Statement of Facts, Issues and Contentions" (dated 26 July 2012), and before the Tribunal, Mr Sneddon sought to rely on the Commissioner's public income tax ruling, Taxation Ruling No. IT 2650, titled "Income Tax: Residency - Permanent Place of Abode Outside Australia" (dated 8 August 1991), in support his contention that he was not an Australian resident for Australian tax purposes in the income year ended 30 June 2009. With respect, public (income tax) rulings set out the Commissioner's views on how particular sections of Australia's income tax legislation apply to certain taxpayers. For instance, IT 2650 provides "guidelines for determining whether individuals who leave Australia temporarily to live overseas, for example, on temporary overseas work assignments….cease to be Australian residents for income tax purposes during their overseas stay.": see Preamble to IT 2650. However, the Commissioner's public rulings (including IT 2650) do not represent the views of the courts or the Tribunal and they are not binding on them.

49. Based on all of the facts and evidence before it, the Tribunal considers that, on balance, Mr Sneddon was a "resident of Australia" for Australian tax purposes in the income tax year ended 30 June 2009 and, specifically, for the purposes of the definition of that term in section 6(1)(a) of the ITAA 1936. That is not to say that Mr Sneddon's residency status may have changed since the income year ended 30 June 2009 if his individual circumstances have changed. However, this is not a matter for the Tribunal's determination in this review application. As such, Mr Sneddon was also an "Australian resident" for the purposes of the definition of that term in section 995-1 of the ITAA 1997 (and as used in section 6-5(2) of the ITAA 1997) in the income year ended 30 June 2009. Such a finding is consistent, in principle, with various recent decisions of the Tribunal, including
Joachim v Federal Commissioner v Taxation 2002 ATC 2088,
Mynott v Federal Commissioner of Taxation [2011] AATA 539 and Iyengar. Specifically, the evidence before the Tribunal establishes that Mr Sneddon maintained a 'continuity of association' with Australia in the income year ended 30 June 2009 despite his physical absence from Australia throughout most of that income year: see also
Koitaki Para Rubber Estates Limited v Federal Commissioner of Taxation [1941] HCA 13; (1941) 64 CLR 241.

50. Further, in reaching the above conclusion, the Tribunal is mindful of the fact that it has been previously said by the Tribunal that the ordinary meaning of "reside" in section 6(1)(a) of the ITAA 1936 should be given the widest possible meaning, as that is what Parliament intended:
Subrahmanyam v Commissioner of Taxation 2002 ATC 2303 at [43 - 44].

51. Having found that Mr Sneddon was an Australian resident according to ordinary concepts for Australian income tax purposes in the income year ended 30 June 2009, it is unnecessary for the Tribunal to consider whether Mr Sneddon falls within the extended statutory definition of "resident" in section 6(1)(a)(i) of the ITAA 1936 (i.e. the "domicile test") in the income year ended 30 June 2009. However, based on all of the facts and evidence before it and the relevant legal principles the Tribunal considers that:

• • Mr Sneddon's 'domicile of origin' is Australia and he never adopted another 'domicile of choice' in respect of the income year ended 30 June 2009. Consequently, Mr Sneddon's 'domicile' in the income year ended 30 June 2009, and for the purposes of section 6(1)(a)(i) of the ITAA 1936, was Australia:
  Henderson v Henderson [1965] 1 All ER 179 and Iyengar at [87], [94] and [96 - 98]; and
• • Mr Sneddon did not establish a 'permanent place of abode' in Qatar, or anywhere else outside Australia, in the income year ended 30 June 2009: Applegate and Iyengar at [102] and [107 - 116].

As such, the income derived by Mr Sneddon from his employment with Fluor in the 2009 tax year was properly included in his assessable income for Australian tax purposes in that year and assessed by the Commissioner accordingly.

DECISION

52. For the above reasons, the Tribunal affirms the Commissioner's objection decision dated 1 September 2011.