Taxation Law Case Study Australia 2022

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
Rule:.......................................................................................................................................2
Application:............................................................................................................................3
Conclusion:............................................................................................................................4
Part B:.........................................................................................................................................5
References:...............................................................................................................................15

TAXATION LAW2
Part A:
Issues:
Whether Racheal will be considered a “tax resident of Australia” under “sec 6 (1)
ITAA 1997” for the whole year or a part of the income tax year of 2019?
Rule:
The test to implement from the definition given in the “sec 6 (1) ITAA 1936” are
a. Whether the taxpayer is considered to be residing in Australia
b. Whether the taxpayer has “domicile in Australia” or they have a permanent location
of abode out of Australia
c. Whether the taxpayer that spends greater than six months of the income year has the
usual abode out of Australia
d. Whether the taxpayer is member of “commonwealth superannuation test”
Resides Test:
Factors that must be considered to take into account is the actual existence of a
taxpayer and family, maintenance of home, employment, business and social relationships,
but no single factor is considered decisive1. In “Dempsey v FCT (2014)” the concerned
taxpayer left Australia to work in Saudi Arabia but maintained a bank account, house and
motor vehicles. The case was concluded by stating that the tax payer was not the resident for
the related period.
Domicile Test:
1 Barkoczy, Stephen, Foundations Of Taxation Law 2018

TAXATION LAW3
A person is resident if they have domicile in Australia, except when the taxpayer has
the “permanent place of abode” out of Australia. In “Harding v FCT (2019)” the term
“permanent place of abode” does not represents the type of house in which someone lives
but includes the place or country where they live in2.
The 183-Days Test:
A taxpayer when present in Australia for greater than 183 days of an income year
either intermittently or constantly will be held resident except when it is satisfied that3;
a. Their regular place of resident out of Australia; and
b. Do not have the intention of taking up the residence in Australia
Commonwealth Superannuation Test:
This is limited to government employees that are posted overseas.
Application:
Resides Test:
Even though Racheal is having a home in domiciliary home in Australia and her
husband and child lives in that house, these aspects are insufficient to treat her as Australian
resident. Racheal is not present in Australia for a very long time throughout the income
period of 2019. In following the situation of “Dempsey v FCT (2014)” Racheal is not a
2 Bird, Richard M., and Eric M. Zolt. "Redistribution via taxation: The limited role of the
personal income tax in developing countries." Annals of Economics and Finance 15.2 (2014):
625-683.
3 Arnold, Brian J., Hugh J. Ault, and Graeme Cooper, eds. Comparative income taxation: a
structural analysis. Kluwer Law International BV, 2019.