Taxation Law: Residency Status and Taxation of Sale Proceeds

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
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1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to Part A........................................................................................................................2
Answer to Part B:.......................................................................................................................5
Answer to question 2:.................................................................................................................6
Answer to Part A:.......................................................................................................................6
Answer to Part B:.......................................................................................................................7
Reference List:.........................................................................................................................10

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Answer to question 1:
Answer to Part A
The existing study is based on determining the status of occupancy for Minh for
assessment purpose. The reading will also ascertain the status of occupancy that effects the
taxation of proceeds generated from Australian and Malaysian sources.
The situation provides that Minh was native in Malaysia and executed her commercial
undertakings. Later in June 2016, Minh was approved with permit to work in Australia and
arrived to Australia with possible intention migrating and commencing business. Instances
suggest that Minh bought a house in Melbourne and lived with her husband and kids and they
were joined in local Melbourne school.
As an over-all rule under “section 6-5 (2), (6-10 (4) of the ITAA 1997” inhabitants
are held taxable for their ordinary and statutory income generated from every bases
(Woellner et al. 2016). As defined stated under “section 6-5 (3) (a) and 6-10 (5) (a) of the
ITAA 1997” an overseas resident will be held taxable on their statutory and ordinary income
obtained from Australia.
Definition provided under “section 995-1 of the ITAA 1997” and under “section 6-(1) of
the ITAA 1997” an Australian occupant for taxation purpose constitutes somebody that are
living in Australian and those that have home in Australia (Barkoczy 2016). An Australian
occupant represent those individual that have been present in Australian moreover frequently
or in breaks for a minimum of six months in a year if the commissioner is content that a
person permeant place of abode is outside Australian and does not intends to take up
Australian residency. To ascertain the residential status of Minh three alternate examination
will be performed whether he will be regarded Australian occupant for assessment purpose;

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a. Residential test
b. Domicile Test
c. 183 days’ Test
Residents Test according to Ordinary Concepts:
The primary test of establishing the residential status of a person is the “Resides Test”.
On meeting this test no more test will be required to determine the residential status of a
person, therefore the person will be regarded as Australian occupant for levy purpose (Tan,
Braithwaite and Reinhart 2016). The word residents constitute living permanently for a
substantial time. The interrogation of detail and point is defined in “Miller v Federal
Commissioner of Taxation (1946)” where the question of fact and degree is depended on
event of case (Cao et al. 2015). The reside test takes account of an individual’s behaviour
when the person is existing in Australia. The “taxation ruling of TR 98/17” in ascertaining
the status of residency for a person under the Resides Test considers the following factors;
a. The determination of taxpayer existence in Australia
b. Taxpayer commercial and domestic links in Australia
c. The social and physical arrangement of the taxpayers
d. Maintenance and location of taxpayer’s assets.
As noticed in case of Minh he migrated to Australia in due course with the intent of
possibly migrating and starting her commercial undertakings. Additionally, she bought a
dwelling in Melbourne to reside with his spouse and kids. Citing the reference of “Macrea v
Macrea (1949)” a migrant that settles with their family in Australia and would be considered
as residing in Australia from the day of entrance in Australia (Braithwaite, 2017). For
example, a person that are migrating to Australia with their family and bought a home in