Taxation Law: Residency Test, Rental Income, Sale of Land

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

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Table of Contents
Answer to question 1:.................................................................................................................2
Issues:.....................................................................................................................................2
Rule:.......................................................................................................................................2
Application:............................................................................................................................4
Conclusion:............................................................................................................................5
Answer to question 2:.................................................................................................................5
Issues:.....................................................................................................................................5
Rule:.......................................................................................................................................5
Application:............................................................................................................................6
Conclusion:............................................................................................................................7
Answer to question 3:.................................................................................................................7
Issues:.....................................................................................................................................7
Rule:.......................................................................................................................................7
Application:............................................................................................................................8
Conclusion:............................................................................................................................9
Answer to question 4:.................................................................................................................9
References:...............................................................................................................................11

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Answer to question 1:
Issues:
Whether the taxpayer will be held as the Australian resident for the taxation purpose relating
to the year 2017/18 and 2018/19 under the legislative sense of “section 6 (1), ITAA 1936”?
Rule:
Denoting explanation in “s995-1, ITAA 1997” Australian resident includes an
individual besides company who is living in Australia and includes those individuals that are
having their domicile in Australia only when the commissioner is content that the taxpayer
has the fixed dwelling place outside Australia (Brauner & Stewart, 2016). A person will be
held Australian resident if the person has been living in Australia either in breaks or regularly
for no less than six months of year unless the taxpayer proves the taxation commissioner that
he or she has their fixed place of dwelling outside Australia and has no intention of living in
Australia.
Referring to “section 995-1, ITAA 1997” to determine the residency status of an
individual there are four test (Grange et al., 2014). They are;
1. Resides Test
2. Domicile Test
3. 183-days Test
4. Commonwealth superannuation Test
Resides Test:
The term resides denotes that to live in Australia for the substantial time period. This
largely involves determining the extent of fact and degree. Accordingly, as per “TR 98/17”
the behaviour of the taxpayer generally involves the extent of existence in Australia, business

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or work purpose, family or social arrangements of living along with the overall time of
presence in Australia. The court in “Joachim v FCT (2002)” held that physical presence and
intention of living in Australia might correspond for most of time but there are some persons
that are commonly considered as residing in Australia (James, 2015). The central focus under
this test is that whether the individual has any continuous relation with the place together
with the aim of coming back to Australia and their attitude towards the place that forms their
continuous home.
Domicile Test:
Accordingly, under “section 6 (1)(a)(ii)” an individual is held to be Australian
resident if their domicile is in Australia except the taxpayer proves that he or she has their
permanent place of dwelling out of Australia (Kenny, 2013). Domicile is ascertained under
the “Domicile Act 1982” and includes person based on their origin of birth. Referring to “IT
2650” the commissioner views that the intended and the actual length of stay of an individual
in the foreign country and includes the intention of abandonment of residence the taxpayer
had in Australia. Accordingly, in “FCT v Applegate (1979)” the law court held that
permanent does not means everlasting or forever and it is evaluated objectively every year.
183-Days Test:
Under this test an individual is held to be the Australian resident if he or she has been
in Australia for a period of six months in the particular income year either on continuous
basis or intermittently, except when the taxpayer proves the commissioner that he has no
intention of taking up Australian residency (Krever, 2013).
Commonwealth Superannuation Test:
This test is applied on individuals that are the member of commonwealth super fund
and they are treated to be Australian resident for taxation purpose.