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

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
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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:...............................................................................................................................12

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Answer to question 1:
Issues:
Will the taxpayer be treated as the resident of Australia under the definition of
“section 6 (1), ITAA 1936” for the purpose of tax?
Rule:
As given under “s995-1, ITAA 1997” Australian occupant denotes those people that
are living in Australia and includes those individuals who has their permanent residence or
house in Australia, barring when the tax officer is satisfied that the taxpayer has the fixed
home in overseas nation (Braithwaite & Reinhart, 2019). A person would be held as
Australian resident either on the continuous basis or sporadically if they have been present
physical in Australia for a minimum of six months barring when the commissioner is content
that an individual has fixed residence out of Australia and has no purpose of living in
Australia.
There are four test given under “s995-1, ITAA 1997” for ascertaining his or her status
of residence in Australia. they are as follows;
a. Resides Test
b. Permanent place of Abode Test
c. 183-Days Test
d. Superannuation Test
Resides Test:
The term resides implies to live for a considerable time period in Australia. It mainly
involves the extent of fact and degree (Barkoczy, 2016). This mainly involves the behaviour
while physically present in Australia. This mainly involves;

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a. The intention of physically present in Australia
b. Family, business or work ties
c. Maintenance and location of Assets
d. Social arrangements for living
Weightage must be provided to each above outlined factor as it will vary with case
and no single factor will be treated exclusive. The court in “FCT v Joachim (2002)” held
that physically present and intentions may overlap for most of the time nevertheless, there are
some persons that may be considered as residing in Australia (Burton & Karlinsky, 2016).
The primary test is, whether the taxpayer has any kind of continuousness with the place
together with the purpose of coming back to that same place and the assertiveness that the
places is their home.
Domicile Test:
Under this test an individual if domiciled in Australia then they will continue to
remain Australian resident despite they live in foreign nation, unless the ATO is content that
an individual has made their permanent home in another nation. The “taxation ruling of IT
2650” deals with the permanent place of abode out of Australia. Relevant consideration such
as the intended length of individuals that stay in their overseas along with the duration and
continuity of a person’s stay in foreign country (Saad, 2014). The abandonment of any place
of residence in Australia and permanency of association which an individual has with the
specific place in Australia. As held in “Applegate v FCT (1979)” the law court held that the
word permanent implies everlasting and its objectivity is determined each year. The taxpayer
was considered to have permanent place of abode out of Australia.
183-Days Test: