Taxation Law: Letter of Advice

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

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Letter of Advice: Private and Confidential
Knight Mare Pty Ltd
14 Aladdin Marine
Trunk Yard Delight NSW
5845
Mr Nguyen
25 St Joseph Street St
Villeneuve VIC 5874
Dear Nguyen
We would like to draw your gentle responsiveness toward are letter of advice that
pursues to report on substances associated to the tax residency position in Australia with the
ATO. In regard to proceed further with our latest meeting, correspondence and discussion
over telephone, we are requesting you to kindly find our letter of assistance in respect of the
several substances inquired by you.
Scope of the letter:
The main scope of this letter of advice is to provide a valued guidance to the client on
how they must respond to the matters that is raised by the ATO in its position paper. The
client is hereby notified that the present letter of advice strictly deals remains limited to the
client’s position of tax residency and income tax consequences for the income earned from
the overseas sources. The letter simply disregards any other tax concerns that would
following given the excess income of the individual to be extracted from other sources.

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Facts of the letter:
The latter is based on the applicable evidences and expectations on the basis of which
the advised are based. We would strongly recommend you to highlight if any of the evidences
and assumption are incorrect or not in agreement with your understanding, kindly feel free to
interact with us immediately as this would create an effect on the advice that is being given to
you. The current letter of advice is built on the applicable taxation rulings, cases and
judgements because we appreciate its submission in your present state of affairs.
Summary of Advice:
We have summarized our opinion below by taking into the account each matters that
is drawn directly above. We have below attached a full conversation regarding the numerous
subjects associated to our information for your examination. We are strongly encouraging
you to recite this conversation in combination with the information provided. We have drawn
our reactions to each of the particular areas relating to your residency and income tax
consequences raised by the ATO in its position paper.
Issues:
The chief issue to the problem is determining whether or not the taxpayer is a non-
resident as explained under the “section 6(1), ITAA 1936” to be an individual who is not the
inhabitant of Australia.
Rule:
As explained in “s 6-5 (2), ITAA 1997” the assessable pays of the Australian resident
involves of the ordinary earnings that is earned from all the sources (Barkoczy 2016). While
for the overseas resident under “s 6-5 (3)(a)” it consist of the assessable earnings as the

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ordinary earnings which is earned from the Australian sources. As a general rule, residency is
regarded as the important source on the basis of which Australia exercises its authority of
imposing tax. Accordingly, under “s-6(1), ITAA 1936” an “Australian resident” means an
individual that are viewed as dweller of Australia or includes someone that resides in
Australia (Brauner and Stewart 2015). The definition states that a person that has the fixed
abode in Australia is considered as Australian resident, except when the taxpayer clarifies
that he or she has the permanent location of residence out of Australia and does not has the
intent of taking Australian residency. In order to ascertain the residency of different taxpayer,
certain different test are applied on the individuals (Sharkey 2016). The rules are as follows;
a. Resides Test
b. Domicile Test
c. The 183-Days Test
d. The commonwealth Superannuation Test
Resides Test:
This test is recognised as the residence in accord with the ordinary notions (Jones
2018). The word “reside” is not explained in the act and its ordinary denotation is obtained
from a vocabulary which explains that to live on the permanent basis or for the momentous
time period (Grange, Jover-Ledesma and Maydew 2014). Ultimately, the court in “FC of T v
Miller (1946)” held that the ascertainment of the tax residency test is reliant on the topic of
fact and degree. The test lay down some vital factor in the determination of the tax residency
position. As per the “Taxation Ruling TR 98/17” these factors are;
a. The amount of time spent by a person physically inside Australia
b. Purpose of visits both in Australian and to abroad
c. The conservation of home in Australia for an individual’s usage.