Australian Income Tax and Tax Law Application

TAXATION
AUSTRALIAN INCOME TAX AND TAX LAW APPLICATION
Name
Course:
Professor’s Name
Institution
City
Date

TAXATION
Part 1;
CPA, Smith Sckenker,
Adelaide Consultancy Ltd,
Unit 59,375 Queen Street
Brisbane, QLD RM 2536.
25Th July 2018.
Mr. & Mrs. Elwood Blue,
Elwood Blues address:
Unit 52, 246 Queen Street
Brisbane, QLD, 4000.
RE: Advisory Letter Addressing Income Tax Law Application and Implication on Mr. & Mrs.
Elwood Residency for Tax Purpose in Australia.
Dear Sir/Madam,
I agree with you that there is the need to know your residency for tax purposes since Australian
Tax Office uses individual residency status to determine how much tax one is obliged to pay as
well as how much deduction is that person allowed to claim as set-offs.
I would like to state that since the family of Mr. Elwood has legally satisfied residency test
relating to domicile according to Australian Tax Office as a result of a purchasing a house that
we are informed he has the strong connection to it he then qualifies to be a residence for tax
purposes in this scenario. Similarly, Elwood is seen to own telephone and electricity bills by
himself thus a more proof of residency.

TAXATION
Likewise using the 183 days residency test of dwell within that year of income I am at liberty to
say the family Elwood has stayed for more than 183days since they came on 1St July 2017 hence
a high approval of being an Australian residence citizen for tax purposes.
The fact that Elwood is close in touch with persons who do gym to an extent of being appointed
president upon joining a local chess club that of course does Corporate Social Responsibility he
thus qualifies to be a resident tax citizen since the family has shown tight ties to the
neighborhood I which in this case is the gym and chess club fraternity.
It is therefore certain that according to TR 98/17, Tax Ruling IT 2607, 2268 as well as subsection
6(1) of the 1936 Australian Act Mr. & Mrs. Elwood qualify to be Australian resident citizen for
tax purposes hence obliged to pay taxes and claim allowable deductions that are within the ATO
tax regulation.
However, I wish to advise this family of Elwood to seek the waiver of double taxation of the
income his house earns him in Australia as stipulated in Tax Ruling 98/7 subsection 29 where
double taxation agreement allows reservation and a percentage portion of the same going to the
country of residence, in this case, is Australia. This fall upon double taxation is essential since
ATO is evident on any foreign income earned by a tax resident should be declared, and own
salary paid.
At this point I wish to inform Mr. Elwood that there is no deduction that is claimable by his
family since at the moment both the cost incurred to extend kitchen as well as electricity and
telephone bills are all termed as private expenditure since there is no business income that is
earned using this house, but he can claim any expense incurred to uplift the charity work done in
this course of being the president of the Chess Club.
I therefore strongly advise Mr. and Mrs. Elwood to do more business in Australian pursuant to
the law of the land without fear of tax since they are termed as Australian resident citizen by