Determining Residency and Source of Taxation for Ms Sierra

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

1Running head: TAXATION
Table of Contents
Issues:.........................................................................................................................................2
Discussion by using tax legislation and case laws:....................................................................2
Conclusion:................................................................................................................................6
References..................................................................................................................................7

2Running head: TAXATION
Issues:
The issue involved in the current case includes the determination of residency and
source of taxation for Ms Sierra and the sources from where the income is derived. The issues
also include whether the taxpayer will be exempted from income derived from the sources
that are out of Australia and whether the activities of the horse breeding undertaken amounts
to business activities by the taxpayer.
Discussion by using tax legislation and case laws:
According to the “section 6-1 (1), ITAA 1936” or “section 995-1 of the ITAA 1997”
resident or the resident of Australia includes person that are residing in Australia and includes
those people that has their residence in Australia, unless the taxation officer is satisfied that
the person has the perpetual place of residence outside of Australia (Blackstone & Chase,
2017). According to the “section 995-1, ITAA 1997” occupant of Australia means an
individual that has actually been living in Australia, constantly or intermittently all through
the six months of the income year, except the taxation commissioner is content that an
individual has the actual place of dwelling outside Australia and that individual has no
intention of taking up the Australian residency.
The description of inhabitant of Australia consists of four different tests and the last
test is evidently an objective (Coleman & Sadiq, 2013). As evident in the current situation of
Sierra she is employed on a luxury liner that travels the Mediterranean Sea and owns an
apartment in Australia. Following the divorce, the apartment has been rented out to her uncle
and she lives in that apartment whenever she returns to Australia. During the present income
year, she spent eighty days by living in that apartment.
To determine the residency status of Sierra certain residency test are conducted;