American on working holiday not Australian resident

The Federal Court has held that a US citizen who came to Australia on a working holiday was not a resident of Australia for the purposes of Australian income tax law. The court found that the US citizen had no settled employment or place of abode in Australia, and her association with Australia during the income year was only ever casual. Her usual place of abode was in the US.

The taxpayer was a US citizen. On 1 September 2016 she left her home in Florida to come to Australia for a working holiday. After spending most of her “gap year” (between finishing high school and starting college) in Australia, she left on 23 June 2017 and returned to the family home in Florida (where she had left the bulk of her clothing and other personal possessions). The taxpayer had entered Australia pursuant to a working holiday visa and declared herself to be a “visitor or temporary entrant” on her incoming and outgoing passenger cards. While in Australia, she stayed at diverse locations and in different types of accommodation, including Airbnbs, youth hostels and at friends’ homes. The taxpayer worked for two different employers in Australia (for three and four months, respectively), identifying herself as a non-resident on her tax file number declaration.

The court said that the taxpayer was a paradigm unsettled itinerant during her time in Australia in the 2017 income year. As a matter of deliberate choice, she had no settled employment or place of abode in Australia. She was a free spirit who never had any plan to live and work at any one location for any particular length of time, much less did so. In this case, the taxpayer’s self-descriptions on her passenger cards and her tax file number application were completely congruent with the objective facts of where and how she chose to live, work and tour.

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