suggested format residence of james principal matters 666972

BULAW 5916 – SUGGESTED FORMAT OF ASSIGNMENT PREPARATION AND PRESENTATION DIRECTION Semester 2 year 2014

PART A Required: (1400 words)

1 For taxation purposes, is James a resident of Australia? What is the source of his salary from Sales International

2 For taxation purposes, is James a resident of Australia? What is the source of his If James sold his house, would he be entitles to the main residence exemption in Subdiv 118 – B?

Suggested format Residence of James – principal matters

1 Introduction

2 Four tests [Two does not appear to apply – 183 days & super test]

3 Residence test [state the law (i) statute law, (ii) case law, and (iii) Tax ruling and apply to the facts of James]

4 Domicile test [state the law (i) statute law, (ii) case law, and (iii) Tax ruling and apply to the facts of James]

5 Period of residency + dual residency with a conclusion for James and

6 Write on tax implication of residency for James

Hints: at least read Sadiq, Barkoczy, Gilders and Woellner and advanced students also read Kenny, Coleman, Burgess and Kobetsky & the suggested ATO Rulings

Suggested Format source of salary income of James – principal matters

1 Introduction

2 Source of employment income

3 State the taxation law (i) statute law, (ii) case law, and (iii) Taxation Ruling, and apply the principles to the facts of James employment income

4 Write a brief conclusion on the assessability of employment income

Hints: at least read Sadiq, Barkoczy, Gilders and Woellner and advanced students also read Kenny, Coleman, Burgess and Kobetsky & the suggested ATO Rulings

Suggested format taxation of the disposal of main residence principal matters

1 Introduction

2 State the statute law including (i) basic rule, (ii) rules that may extend the exemption, (iii) rules that may limit the exemption, and (iv) partial exemption rule, and then apply the principles to the facts of James

3 Write a brief conclusion on the assessability of the net capital gain, if applicable

Hints: at least read Sadiq, Barkoczy, Gilders and Woellner

PART B Required: (600 words)

Should Lee return on a cash or accrual basis in 2012/13 and 2013/2014

Professional services (business) income

1 Derivation of income – an Introduction

2 State the law (i) statute law, (ii) case law, and (iii) Tax ruling (TR 98/1, especially the following aspects

· Factors that affect the choice of cash or accrual basis

· Does Lee have a choice of the basis he adopts

· Does the commissioner of taxation has a right to insist on a particular basis?

3 Apply these laws to the facts of Lee’s business as an architect and comment on whether Lee’s income should be assessed on the same basis in both years.

Hints: at least read Sadiq, Barkoczy, Gilders and Woellner and advanced students also read Kenny, Coleman, Burgess and Kobetsky & the suggested ATO Rulings

LIST OF REFERENCE

Basic resources:

1 Textbooks – SADIQ, WOELLNER AND GILDERS

Principles of Taxation Law – SADIQ

· Chapter 4 Residence and source pp 81 106

· Chapter 11 Capital gains (main residence exemption pp 326 331

· Chapter 16 Tax accounting (derivation of income pp 515 539)

Australian Taxation Law – WOELLNER

· Chapter 13 Tax accounting (derivation of income pp 651 702)

· Chapter 08 Capital gains (main residence exemption pp 355 365

· Chapter 24 International aspects (residence & source pp 1260 1289)

Understanding Taxation Law – GILDERS

· Chapter 4 Derivation & measurement of income

· Chapter 6 Capital gain (main residence exemption Pp 381 388

· Chapter 2 Residence and source Pp 76 88

2 Taxation case book – Krever

· Chapter 11 Tax accounting (derivation pp239 249)

· Chapter 17 International aspects (residence & source pp 325 338)

Principles cases – SADIQ, WOELLNER AND COLMAN

· Levene v IRC [1928]

· IRC v Lysaght [1928]

· Miller v FCT [1946)

· Joachim v FCT (2002) 50 ATR 1072

· FCT v Applegate (1979) 9 ATR 899

· FCT v Jenkins (1982) 12 ATR 745

· FCT v French (1957)98 CLR 398

· FCT v Efstathakis (1979) 9 ATR 867

· FCT v Mitchum (1965) 113 CLR 401

· Carden’s case (1938) 63 CLR 108

· Gulland v FCT ( ) 83 ATC 4352

· FCT v Firstenberg (1976) 76 ATC 4141

· FCT v Dunn (1989) 20 ATR 356

· FCT v Henderson (1970) 119 CLR 612

· Barratt v FCT (1992) 23 ATR 339

· Dormer v FCT (2002) 51 ATR 353

3 Taxation Rulings

· TR 98/17 Residency of individuals entering Australia

· IT 2650 Permanent place of Abode outside Australia

· TR 98/1 Determination of income: receipts versus earnings basis

Residence of BASIL YEAR 30 JUNE 2013

Tax residence is very important for many reasons for individual taxpayers like basil. First, the individual taxpayers get a tax free threshold of $18 200 for a full year of residence. Second they pay tax at a rate which is different from the rates applicable to that of non resident individual taxpayers. Third assessable income of resident individuals income all income both Australian and international and finally resident taxpayers are allowed many tax offsets.

Tax residence is different from the residency of individuals under the nationality Act. Tax residency is determined in accordance with the Taxation Statues. Section 6(1) of Income tax assessment Act 1936 defines a person as resident of Australia when he resides in Australia and includes a person (i) whose domicile is in Australia, unless the Commissioner is satisfied that his permanent place of abode is outside Australia, (ii) who has actually been in Australia, continuously or intermittently, during more than one half of the year of income, unless the Commissioner is satisfied that his usual place of abode is outside Australia and he does not intend to take up residence in Australia, and (iii) a member of the Commonwealth superannuation scheme. Therefore there are four separate and exhaustive tests for determining whether an individual is resident of Australia for tax purposes:

· Residence test

· Domicile test

· The 183 day test, and

· Superannuation test

PART B Required: (1000 words)

Should Lee return on a cash or accrual basis in 2012/13 and 2013/2014

Professional services (business) income

4 Derivation of income – an Introduction

5 State the law (i) statute law, (ii) case law, and (iii) Tax ruling (TR 98/1, especially the following aspects

· Factors that affect the choice of cash or accrual basis

· Does Lee have a choice of the basis he adopts

· Does the commissioner of taxation has a right to insist on a particular basis?

6 Apply these law to the facts of Lee’s business as an architect and comment on whether Lee’s income should be assessed on the same basis in both years.