Taxation Law Issue Australia Question Answer 2022

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

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Issues:.....................................................................................................................................2
Rule:.......................................................................................................................................2
Application:............................................................................................................................4
Conclusion:............................................................................................................................5
Answer to question 2:.................................................................................................................6
Issues:.....................................................................................................................................6
Rule:.......................................................................................................................................6
Application:............................................................................................................................7
Conclusion:............................................................................................................................7
Answer to question 3:.................................................................................................................8
Issues:.....................................................................................................................................8
Law:........................................................................................................................................8
Application:............................................................................................................................9
Conclusion:............................................................................................................................9
Answer to question 4:...............................................................................................................10
References:...............................................................................................................................12

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Answer to question 1:
Issues:
The issue addressed in this question is associated with ascertaining the residential
status of Adam based on the law making provision of “section 6 (1), ITAA 1936”.
Rule:
Under the definition of “section 995-1, ITAA 1997” an individual is said to be an
Australian dweller that is an inhabitant of Australia for the purpose of “ITAA 1936” (Saad,
2014). Denoting the description under “section 6 (1) ITAA 1936” an inhabitant of Australia
includes those individual that resides in Australia and has the permanent home in Australia
excepting when tax official is comfortable that an individual has the perpetual home in
foreign country. There are four alternative test that is given under “section 6 (1) ITAA 1936”,
for individual resident and they are;
a. The common law test
b. The domicile test
c. The 183-day test
d. The superannuation test
The common Law Test:
A taxpayer is said to be occupant of Australia for tax purpose if they are really present
in Australia, unrelatedly of their ethnic group and locality of their stable residence. In view of
that, whether or not a person is treated as “resides” is reliant on particular circumstances.
Relevant consideration such as behaviour at the time of residing in Australia along with the
intention or employment ties are relevant factors (Lang et al., 2018). Appropriate weightage
must be given to each factor. A tax payer is said to be living in Australia given their

TAXATION LAW3
behaviour over the time portray a mark of continuity, habit or routine which is treated as
consistent with living here. As found in “The Engineering Manager v FCT (2014)” an
engineer working under the one-year contract in Oman which was reviewed on yearly basis
was not treated as Australian resident even though his spouse and kids remained in Australia
and came back yearly to meet them.
The Domicile Test:
An individual’s home establishes a lawful relation with the country through which a
person is able to invoke the laws of country as their own. An individual home represents their
permanent home instead of where the person lives (Woellner et al., 2016). In “sec 6 (1),
ITAA 1997” a tax payer is held to Australian resident if they are having the Australian home
excluding when the taxpayer can prove that they have set up their permanent home in foreign
nation (Gordon & Kopczuk, 2014). The court in “Applegate v FCT (1979)” found that
regardless of the taxpayer has retained the Australian dwelling, he has set up the permanent
dwelling somewhere else.
As per ruling of “IT 2650” it explains the factor which should be considered to treat a
tax payer that leaves Australia momentarily to be present in foreign country and obtains the
permanent foreign place of residence and hence ceases to be an Australian occupant during
the absence (Pogge & Mehta, 2016). This includes the intention and length of stay in foreign
nation or whether they have set up the fixed home out of Australia.
183-Days Test:
A ta payer that is present in Australia for greater than 183 days in the income year
will be held as Australian occupant unless it is agreed that their usual place of abode is
outside Australia (Barkoczy, 2016).