LAW6001 Taxation Law Case Study

Question 1 (10 marks)

Adam Collins was born in Australia and works as an international airline pilot. He is married to Narelle and they have two school aged children. Adam and Narelle own a house in Sydney and receive interest on savings from their joint Australian bank account. Adam pays for Australian private health insurance for the family and has share investments in the airline on which he receives dividends. From 1 November 2017 until 1 April 2018, Adam was based at the airline’s hub in Dubai and lived in an apartment leased by the airline. The airline paid five months of Adam’s $500,000 annual salary directly into a bank account that he established in Dubai. Adam took annual leave in December and returned to Australia to spend Christmas with the family.
In May 2018, Adam accepted an offer to relocate with Narelle to Dubai for an indefinite period. The couple flew to Dubai on 1 July 2018. They established a joint bank account with a local bank and in November 2018 purchased an apartment close to Dubai airport. The children moved to a boarding school in Sydney. Adam and Narelle maintained their joint bank account and private health insurance in Australia and rented out their Sydney home. Adam took six weeks of annual leave during December 2018 and January 2019 and returned to Australia with Narelle to spend time with their children and inspect their home.

Required:

Advise Adam Collins as to whether he is an Australian resident or non resident for tax purposes for the 2017/18 and 2018/19 years. You must include relevant section numbers and cases in your explanation.