Question:

Discuss whether fred is a resident of Australia for taxation purposes.Explanations of the respective outcomes reached  by the courts in the following cases.

Answer:

Case Study 1

Fred has moved to Australia to build a branch of the British corporation specializing in management consultancy where he is employed. The length of his stay in Australia is not definite but would depend on the time it takes to set up the new office. He leases a residence within Melbourne for 12 months for himself and his wife. His sons continue their stay in London for education. He even rents out the family home and earns interest from his investments in France. However, due to health issues, he returns to the UK after spending a period of 11 months in Australia.

An individual is an inhabitant for taxation purposes if they (ato.gov.au(b), 2016);

• have dependably lived within Australia
• moved to Australia and at present live here for all time
• have been in Australia persistently for 6 months or more than that and for a large portion of that time they have worked the same employment and lived within the same spot
• were within “Australia” for more than half of the fiscal year, unless
  • their regular home is abroad, and
  • they don't plan to live within Australia
• go abroad for the time being and they don't set up a perpetual home in another nation, or
•  They are an abroad understudy who had come to Australia for studying and are selected in a course that is over 6 months in length.

When an individual don't fulfill the residing test, despite everything they are still be viewed as an Australian occupant in the event that they fulfill one of 3 statutory tests:

• The domicile test: A person is an Australian inhabitant if their residence (comprehensively, the spot that is their permanent house) is within Australia, unless it was fulfilled that their permanent spot of residence place is outside Australia.
• The 183-day test: If a person is actually within “Australia” for more than six months of the fiscal year, whether ceaselessly or with breaks, they might be said to have a useful living arrangement within “Australia”, unless it could build up that their standard spot of home is out of “Australia” and they have no goal of carrying out with the habitation here.
• The superannuation test: This test ensures that government of Australian staffs operating at “Australian posts” overseas are coping with as “Australian” occupants

International tax for people

Australian occupants are for the most part taxed on their overall pay from every source. Impermanent inhabitants of Australia and overseas occupants are by and large taxed just on their Australian-sourced earnings, for example, cash they are earning while working within Australia (ato.gov.au(c), 2016). To comprehend their taxation circumstance an individual initially need to work out in the event that they are an Australian or overseas occupant for taxation purposes. This might be distinctive to their residency status for different purposes – like, an individual could be an Australian occupant for taxation purposes regardless of the fact that they are not an Australian national or permanent inhabitant. Fred satisfies the conditions of residency test and the “183-day test”, he would be considered as a occupant of “Australia” for taxation purposes

Case study 2

1. “Californian Copper Syndicate Ltd V Harris (surveyor of Taxes) (1904) 5TC 159”
2. “Scottish Australian Mining Co Ltd v Fc of T (1905) 81 CLR 188”
3. “FC of T v Whitfords Beach Pty Ltd (1982) 150 CLR”
4. “Statham & Anor v FC of T 89 ATC 4070”
5. “Casimaty v FC of T 97 ATC 5135”
6. “Moana Sand Pty Ltd v FC of T 88 ATC 4897”
7. “Crow v FC of T 88 ATC 4620”
8. “McCurry & Anor v FC of T 98 ATC 4487”