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Assignment on Australian Tax Law

   

Added on  2021-04-17

6 Pages1184 Words46 Views
Running Head: TAX LAWTax LawName of the Student:Name of the University:Author Note
Assignment on Australian Tax Law_1
1TAX LAWIssue Whether John is a resident of Australia for Australian taxation purpose in FY2016Whether John is a resident of Australia for Australian taxation purpose in FY2017Rule There are four test which are applied for the purpose of determining whether a person isresident of Australia for Australian taxation purpose of not. Where any test provides a positiveresult than the person is considered as an Australian Resident for Taxation purpose. These tests are Ordinary concepts test, 183 days Test, Domicile Test and Superannuation TestThe definition of resident is provided under s 6(1) Income Tax Assessment Act 1936(ITAA). According to the section a person who resides in Australia includes a person who has adomicile in Australia unless it is held by the minister that the person permanent place of abode isnot in Australia or the person has been in Australia for a period of more than half a year unlessthe commissioner holds that the person does not intend to stay in Australia1. Ordinary concepts test In the case of Miller v FCT2 it had been stated by the court that whether a person is a resident ornot is analyzed by matter of “fact and degree”. The meaning of the term reside has not beenprovided in any legislation and is determined through a dictionary meaning which is “to dwellpermanently or for a considerable time”. Thus as per the test the court takes into considerationthe time which the person has spent in Australia, the purpose of the visit, having a residence inAustralia, and the person’s social ties. 1 Income Tax Assessment Act 1936 (Cth) s 6(1)2 Miller v FCT (1946) 73 CLR 93
Assignment on Australian Tax Law_2
2TAX LAWAs per the test emphasis is put by the commissioner on the intention for stay, location andmaintenance of assets, living and social ties. It has been provided by Tax Ruling 98/17 thatwhere an individual “resides” in Australia as per the dictionary meaning of the words resides theother tests which have been provided through the definition do not require consideration.However where the person is not “residing” in Australia the consideration of other test has to bedone to analyze the residency status of the individual3. It has also been provided through the ruling that the length of time or period of physical presencein Australia is not solely decisive while analyzing a person is residing in Australia. However thebehavior of an individual with respect to the time spent in Australia may provide a degree ofhabit, routine or continuity which is consistent with the meaning of the word reside. Thecommissioner’s view in relation to law is that six months is a considerable time to determinewhether a person is a resident of Australia or not for tax purpose. However merely because aperson is staying in Australia for a period of 6 months he is not an Australia resident for thepurpose of tax as per Tax Ruling 98/17. Under the domicile Test if a person has a permanent “place of abode in Australia” he is aresident unless the minister has a finding that his permanent place of abode is outside Australia.However it had been ruled in the case of Federal Commissioner of Taxation v Applegate4 thecourt held that permanent does not mean forever Under the 183 day test if a person resides in Australia physically, intermittently or continuouslyfor more than half off the income year he is a resident for tax purpose. However where thecommissioner is satisfied that the usual place of abode of the individual is outside Australia and3 Legal Database (2018) Ato.gov.au <https://www.ato.gov.au/law/view/document?Docid=TXR/TR9817/NAT/ATO/00001>4 Federal Court of Australia in Federal Commissioner of Taxation v Applegate (1978) 9 ATR 899
Assignment on Australian Tax Law_3

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