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Superannuation Fund Test
Added on -2019-09-25
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HI6028 Assignment~ 1 ~
Table of ContentsQuestion 1 ........................................................................................................................ Page no. 2Question 2 ........................................................................................................................ Page no. 5 References ........................................................................................................................ Page no. 11~ 2 ~
Question 1IssueFred comes to Australia for setting up a branch of a company he is the owner of. The residence he will be living during his stay in the country is on lease for 12 months. Apart from his wife no one accompanies him. Will he be assessable under Australia?LawTaxation Ruling 98/17ITAA 1936ApplicationThe ruling 98/17 provides for the meaning of resident of Australia under the following categorieswhich are used to define the residency of an individual if passed. These are:a.Residency in Australia – Individual who is having a place to reside in the country or is residing since long.b.Domicile in the country – Place of living is present in the country which is a permanent place of aboad. There should not be any other place to live outside other than Australia to be a resident of the country.c.Living in the country for more than half of the period of taxation. The number of days to be counted for this must be from the 1st day of the taxation year, i.e. 1st July to 30th June ofnext year. It may be in continuity or intermittently. ~ 3 ~
d.Superannuation fund test where the individual is registered under Superannuation Act, 1990 or is an employee under the act of 1976 or the individual is the spouse or a child who is below the age of 16 of such employee.An individual who passes any of test or many, will be considered to be a tax resident of the country. Under section 6-1 of the ITAA 1936, a person who is a resident of country is taxable forhis incomes earned in the country. For individuals who are residents of the country just for tax purpose will be taxable on income which has he source in Australia.To be a resident of the country, there must be one test from the above to be passed. For the first test, Fred is residing in the country for a period of 11 months. He has a place to live in the country. Second test, stating the domicile is not passed by him, as the permanent place to abode is not located in country. UK is the place of domicile for him as it is clearly given that he will be present in the country for 12 months period. Third test of living in country for more than half of the year is fulfilled by him. He is present for 11 months continuously which is more than half of the year. Last test of superannuation is not completed or taken for him, as there is no information on such test.Now, as it can be seen that Fred is fulfilling two test out of four, he is a tax resident of Australia.ConclusionFred will be assessable for his incomes made in the country as he is a tax resident of Australia. He will not be taxable for incomes made in UK.~ 4 ~
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