The Small business restructure

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Part A:........................................................................................................................................2
Issues:.....................................................................................................................................2
Laws:......................................................................................................................................2
Application:............................................................................................................................2
Conclusion:............................................................................................................................4
Requirement (I):.....................................................................................................................5
Requirement (II):....................................................................................................................5
References:.................................................................................................................................6
Part B: Small Business CGT Concession...................................................................................7
References:...............................................................................................................................17

TAXATION LAW2
Part A:
Issues:
 Whether Catherine who has arrived in Australia with a 12 month working holiday
visa will be considered as Australian resident under “section 6 (1) ITAA 1936” or a
foreign occupant under “section 6-5 (3) ITAA 1997”?
 Will the salary earned by Catherine would be included in her assessable returns and
taxable within the ordinary concept of “section 6-5, ITAA 1997”?
Laws:
 “Section 6 (1) ITAA 1997”
 “Section 6-5 (2) ITAA 1997”
 “Section 6-5 (3) ITAA 1997”
 Gregory v FC of T (1937)
 Nathan v FCT (1918)
 Moore v Griffiths (1972)
 FCT v Spotless Services (1995)
Application:
Catherine will not be considered as Australian resident even though he stayed in
Australia for 12 months. In other words, Catherine is a foreign resident under “section 6-5 (3)
ITAA 1997”. Citing “Gregory v FC of T (1937)” even though Catherine stayed in Australia
for 12 months, her behaviour demonstrated that he was a visitor1. Her main objective was to
have a working holiday in Australia and fund the same with the help of casual employment
and intermittent work2. While Catherine stayed in Brisbane she did not treated any habitation
1 Woellner, Robin, et al. "Australian Taxation Law 2016." OUP Catalogue (2016).
2 Jones, Daryl. "Complexity of tax residency attracts review." Taxation in Australia 53.6 (2018): 296.

TAXATION LAW3
as if it were her “home” or as separate from any other place where somebody may stay while
they are on working holiday. Referring to the description made by the ATO it should be
noted that majority of the people that come to Australia for a working holiday or visit are not
treated as Australian dweller inside the ordinary sense of the “section 6 (1) ITAA 1997”3.
The main reason for treating Catherine as a non-resident because her visit is very
much consistent with her visa requirements and she does not have any intention of staying in
Australia however only has the intention of having a holiday while simultaneously working
for a short time period. Unlike majority of the people, Catherine holds the working and
holiday visas which is consistent with her requirements of visa and does not has the purpose
of residing in Australia, but only has the intention of having a holiday in Australia and work
for some time before coming back to home once she has finished travelling.
Unlike majority of the individuals, her behaviour while existent in Australia is not
constant with this purpose and hence not consistent with being an Australian dweller.
Catherine will not be considered as an Australian occupant inside the conventional concept of
“section 6 (1) ITAA 1997” simply because she rents a shared house with other working
holiday makers or stayed in another place for the extended time period4. As the working
holiday maker, the first $37,000 of Catherine income will be levied tax at a rate of 15% and
the balance is taxed at the ordinary rates.
Apart from the residency status of Catherine, the sources of income are primarily
relevant for the Non-residents. Referring to “Nathan v FCT (1918)” determining the original
3 Barkoczy, Stephen. "Foundations of taxation law 2016." OUP Catalogue (2016).
4 Blakelock, Sarah, and Peter King. "Taxation law: The advance of ATO data matching." Proctor, The 37.6
(2017): 18.