Taxation Notes - summaries PDF

Preview

Summary

summaries...

Description

AUSTRALIA TAX year 1st July – 30 June (S6(1))  income tax assessment S6(1) of ITAA and Section 995- of ITAA 1997 provides the meaning of resident a person who is a resident of Australia for the purposes of the ITAA 1936. TR98/17 – people coming into Australia  to test the reside by the government The four tests, one common law test and three statutory tests Common law – reside test • A person who resides in Australia – This test is referred to as the ordinary concepts test and is based on the common law: Then common law case law (Miller v FCT) Statutory Test • The domicile test – A person whose domicile is Australia, unless the Commissioner is satisfied that his or her permanent place of abode is outside Australia, is considered a resident of Australia: • The 183- day test – A person 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 or her usual place of abode is outside Australia and that he or she does not intend to take up residence in Australia, is considered a resident of Australia: see [4.130]. • The superannuation test – A person who is a member of a superannuation scheme established by deed under the Superannuation Act 1990(Cth) or an eligible employee for the purposes of the Superannuation Act 1976 (Cth) or the spouse, or a child under 16, of a person covered by those Acts, is considered a resident of Australia Ruling TR 98/ 17, Miller v FCT (1946) Levene v IRC [1928] AC 217 - Residency – temporary visits abroad the fact that the purposes for going abroad were nothing more than temporary. Therefore is a resident IRC v Lysaght [1928] AC 234. - Residency – moved abroad The taxpayer was resident and ordinarily resident the person held to reside does so in the ordinary course of life Joachim v FCT (2002) 50 ATR 1072 - Residency – family home in Australia and intention to treat Australia as home The factors considered by the courts are as follows: • Physical presence in Australia Joachim v FCT (2002]. • If the person is a visitor, the frequency, regularity and duration of visits – IRC v Lysaght [1928] AC 234 is an example of a taxpayer living in one jurisdiction (Ireland) but visiting another (England) with frequency and regularity. The duration of the visits will also be considered.

• The purpose of the visits to Australia and abroad – If the person is a visitor to Australia, the purpose of the visit may be considered. Conversely, if the person is outside Australia for part of the income year in question, the purpose of the absence may also be relevant. • The maintenance of a place of abode in Australia for the taxpayer’s use – Whether a person has a home available for use in Australia is an important factor in deciding whether he or she continues to be a resident in Australia.

• The person’s family, business and social ties – Similar to the maintenance of a place of abode, the location of a person’s family, business and social ties will provide evidence of residence: Levene v IRC [1928] AC 217. • The person’s nationality – A person’s nationality will not normally be a relevant factor in considering residency where other factors are clearly decisive. However, if a case is borderline, nationality may be considered. The Commissioner places emphasis on: • intention or purpose of presence; • family and business or employment ties; • maintenance and location of assets; and • social and living arrangements Domicile test A fixed period student visa or working visa would not satisfy the test for domicile of choice. This test generally applies to individuals leaving Australia. FCT v Applegate (1979) What constitutes a permanent place of abode outside Australia. Factors considered relevant are as follows: • the intended and actual length of the taxpayer’s stay in the overseas country; • whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or to return to Australia at some definite point in time; • whether the taxpayer has established a home (in the sense of dwelling place; a house or other shelter that is the fixed residence of a person, a family or a household) outside Australia; • whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence; • the duration and continuity of the taxpayer’s presence in the overseas country; and • the durability of association that the person has with a particular place in Australia, that is, maintaining bank accounts in Australia, informing government departments such as Centrelink that he or she is leaving permanently and that family allowance payments should be stopped, place of education of the taxpayer’s children, family ties and so on.

183 days Test - The first part of this test is purely mathematical, taking into account hours if necessary. 183 days -

The second part of the test provides an exception.

There are two limbs to the exception – the taxpayer has a usual place of abode outside Australia, and he or she did not intend to take up residence in Australia. 183- day test to individuals on working holiday

Re Koustrup v FCT [2015] AATA 126. In that case, despite the taxpayer being in Australia for more than 183 days, she was held to have a usual place of abode outside Australia and was therefore not entitled to the tax- free threshold under the residency tax rates.

Assessable income 1. Moorehouse (Inspector of Taxes) v Dooland [1955] 1 All ER 93 2. Seymour v Reid [1927] AC 554 3. Moore v Griffith [1972] AC 399 4. Scott v FCT (1966) 117 CLR 514 5. Dixon v FCT (1952) 86 CLR 540 Scott v Commissioner of Taxation

FCT v Cooke and Sherden Not cash or cash convertible it will definitely not be ordinary income

Source of income  FCT V frddige...