Taxation Law - Letter of Advice

Running head: TAXATION
Taxation Law
Name of the Student
Name of the University
Author Note

TAXATION1
Letter of Advice
Private and Confidential
Lawyers & Co.
14 Smith St
Smithville VIC 3207
Mr. Nguyen
20 Smith St
Smithville VIC 3207
In pursuance to the last meeting as well as telephonic conversations along with other forms of
communications, please find the attached letter regarding the concern of your taxation residency.
Summary of Advice
An advice relating to your residency within Australia for the purpose of taxation as disputed by
the ATO would be e inculcated within this letter. This advice will guide you for making a choice with
respect to the option that will be apt for you in the present circumstances. In this furtherance, the legal
concerns arising from the circumstances would be detected. Relevant legal rules with respect to the issues
will be mentioned in this letter. This letter also address facts of the situation under the legal principles
mentioned and would provide for conclusion regarding the same. The letter would be centred around the
determination of residency in Australia pertaining to Nguyen in 2017 and 2018. The options of pursuing
an audit or self amendment would also be assessed under this advice.
Issue
The issues arising from the circumstances are:

TAXATION2
• Whether for the purpose of tax year 2017 and 2018, Nguyen would be considered as Australian
resident.
• Whether while addressing the dispute raised by ATO, Nguyen should opt for self-amendment or
he should pursue audit.
Rule
The individuals rendered as residents belonging to Australia would obligated for the inclusion of
all his earnings giving no regard to its source within the assessable income as for Australian taxation law.
Again, according to the legal principles enumerated in the proceeding of FCT v Efstathakis [1979] 9 ATR
8671, all the income source from foreign foundations would be included to be taxed in Australia and not
the earnings of sources outside the purview of Australia.
As per the provision contained in s 995.1, ITA Act 972, individuals who would be regarded as
residents of Australia as per the provisions of ITA Act 363, would be e included within the list of residents
for tax purposes. The provisions relating to the assessment of the residency of an individual in Australia
has been contained in s 6.1, ITA Act 364 as to be determined after the application of four test and
satisfaction of them. These tests can be enumerator as the resides test, domicile test, 183 Day test and
superannuation test. For the purpose of individuals having origin in Australia and eventually leaving
Australia under the scope of employment would be required to be applied with the residency test and the
domicile test in assessing there residency.
This test needs the individual whose residency is under consideration to actually reside within the
precincts of Australia for the purpose of his residency being established in Australia with respect to taxes.
Again, the explanation of the terminology resides has not been clearly provided within the statute and
requires consideration of its normal meaning. The implication of this requires a person to actually live in
1 FCT v Efstathakis [1979] 9 ATR 867
2 The Income Tax Assessment Act 1997, s 995.1
3 The Income Tax Assessment Act 1936
4 The Income Tax Assessment Act 1936, s 6.1