Introduction: The Strange Case of the Tax Resident of a Tree
Australian taxation law has produced some unforgettable stories, but none stranger than the man who became a tax resident of a tree. It is a real example of how tax residency rules, the permanent place of abode test and ATO reviews operate when confronted with unusual living arrangements. For background on residency rules, the ATO provides detailed guidance here:
https://www.ato.gov.au/individuals/international-tax-for-individuals/work-out-your-tax-residency/
A Confident Plan for Tax Freedom
Gregory Allan Marsh owned a construction business on the Sunshine Coast. He had a company, an SMSF and several complex structures, but very little interest in the finer points of residency law. When he decided to become a “digital nomad,” he believed simply living overseas would end his Australian tax obligations.
For anyone considering a move overseas, the Australian Government’s guidance on living abroad is a helpful starting point:
https://www.smartraveller.gov.au/before-you-go/activities/living-overseas
Unfortunately, Greg skimmed an outdated article and assumed he was immediately a non-resident. He moved to Bali and proudly set up home in a bamboo treehouse.
Tax Residency Meets Tropical Minimalism
Months later, the ATO detected that Greg was accessing his Australian accounts from overseas IP addresses and initiated a routine residency review.
The ATO asked standard questions:
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Where do you ordinarily reside?
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Where is your permanent home?
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Where do you keep your belongings?
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What is your long-term intention?
Greg answered each question with earnest descriptions of his treehouse. The more information he provided, the more unusual the case became.
The ATO’s Dilemma: Can a Treehouse Be a Permanent Place of Abode?
The matter escalated through several ATO teams before the Residency Review Panel was forced to consider a question that had never arisen before:
Can a bamboo structure seven metres above the ground qualify as a “permanent place of abode” under Australian tax law?
The ATO’s detailed guidance on the permanent place of abode test can be found here:
https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests
After reviewing photographs, structural details and Greg’s explanations, the panel concluded:
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Greg had clearly left Australia;
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but the treehouse did not meet the minimum standard of permanence or suitability to qualify as an overseas abode.
Since he had not established a permanent home outside Australia, Greg failed the test. His domicile remained in Australia under the residency framework explained here:
https://chrisgarlickbarrister.com.au/tax-residency-domicile-test/
The Tax Resident of a Tree
The official conclusion was extraordinary but legally correct:
Greg remained an Australian tax resident for the entire period he claimed to be a non-resident. The only place he consistently described as his home was the treehouse, but it was not a dwelling capable of altering his residency status.
He had become, for one financial year, a tax resident of a tree.
Anyone facing a similar residency issue can read more about Australian tax residency rules here:
https://chrisgarlickbarrister.com.au/tax-residency-australia/
A Final Twist from Overseas Authorities
While the ATO conducted its review, Indonesian authorities separately examined Greg’s unusual living arrangements. His treehouse breached several local building and zoning rules, as well as environmental protections. General guidelines for construction compliance in Indonesia and similar jurisdictions can be found here:
https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/ehs-guidelines
Greg was fined, the structure was closed, and he eventually returned to Australia.
Why This Story Matters for Tax Residency Advice
The story of the tax resident of a tree is now quietly referenced among accountants, lawyers and advisers because it highlights common misconceptions about residency.
Key lessons:
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Tax residency cannot be declared unilaterally.
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Leaving Australia is not enough to cease residency.
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A permanent place of abode overseas must meet objective legal standards.
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Unusual living arrangements rarely satisfy residency criteria.
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Proper legal advice is essential before restructuring or relocating.
Individuals facing complex residency matters, or those who receive ATO review letters, may require formal legal assistance. More on ATO dispute representation is available here:
https://chrisgarlickbarrister.com.au/ato-disputes/
Conclusion
The case of the tax resident of a tree is a reminder that Australian tax residency law is both precise and unforgiving. Attempting to rely on informal advice or unusual living arrangements can lead to unexpected outcomes. Anyone considering an overseas move or a change in tax residency should obtain formal advice before acting.
For tailored legal guidance on residency, domicile or international tax matters, individuals can contact the chambers here: