Taxation Law: Residency Status and Fringe Benefits

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

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................6
Answer (A):............................................................................................................................6
Answer (B):............................................................................................................................7
Answer (C):............................................................................................................................7
Answer (D):............................................................................................................................8
Answer to question 3:.................................................................................................................9
References:...............................................................................................................................13

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Answer to question 1:
Issues:
The question is concerned with the issue of whether the taxpayer will be treated as
Australian resident under “subsection 6 (1), ITAA 1936”.
Rule:
The “taxation ruling IT 2650” main purpose is to lay down the direction in
ascertaining whether or not a person that goes out of Australia for a short stay to visit in
abroad for short-term employment assignments stop being an resident of Australia for tax
purpose for the duration of their time in abroad stay. The constitutional explanation of
resident given in “subsection 6 (1), ITAA 1936” says that an individual is an Australian
occupant that is living in Australia (Norbury, 2019). The definition also includes a person that
has their domicile in Australia, excepting when the tax administrator is gratified that their
perpetual home of habitation is out of Australia. The explanation which is given in “sec.6 (1),
ITA Act 1936” explains that there are four diverse types of tests. These are;
a. The common law test
b. Domicile Test
c. The 183-day test
d. Commonwealth superannuation fund test
The common test or reside test:
The common law test explains that the applicable discussion includes the behaviour
when they are existing in Australia. This test take account of intention or objective of coming
to Australia such as the family, business or employment ties (Lam, 2018). It also consist of
the maintenance and place of assets, societal and living preparations. Time of physical

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existence in Australia is also important. Weightage should be provided to every factor and
not a single factor can be held convincing. In the recent examples of “Iyengar v FCT (2011)”
an engineer took up 2 plus year job in foreign however, the family home was maintained in
Australia by the taxpayer and he also returned back to Australia. He was beheld as the
Australian occupant with “sec 6 (1), ITAA 1936”.
Domicile Test:
This test considers a person to be an Australian occupant when it is noticed that they
have maintained a home in Australia even though they are living in overseas. Unless the ATO
is gratified that the taxpayer has made their dwelling in abroad. The ruling of “IT 2650”
inspects the factors which needs to be considered when someone moves out of Australia
briefly to be present in abroad and acquires an enduring home in overseas, then they will be
observed as Australian dweller when they are absent from Australia (Miller, 2018).
In “Applegate v FCT (1979)”, the court noticed that they have set up the permanent
home somewhere else (Roberts, 2019). The expression “permanent” in this instance was
something not as much of permanent and represented a static or customary home. In
alternative example of “Boer v FCT (2012)”, the taxpayer was held to be Australian
occupant for the duration of their visit in abroad nation since no permanent home was set up
out of Australia.
The 183-days test:
This test is based on determining the total sum of days present in Australia by a
person. A person will be Australian resident when they live in Australia for 183 days or more
(Barkoczy, 2016).
Commonwealth superannuation test: