Taxation Australia Letter 2022

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

TAXATION1
LETTER OF ADVICE
Private and Confidential
Xyz and Co.
14 Smith St
Smithville VIC 3207
Mr. Nguyen
20 Smith St
Smithville VIC 3207
In the furtherance of the recent meeting, conversations over the phone and communications in
other forms, we would like you to find the letter attached with respect to the concerns arising in relation
to your residency for tax purposes.
Summary of Advice
This letter would strive to provide you with the advice regarding your residency in Australia for
taxation purposes that has been recently disputed by the ATO and would assist you to make a choice
regarding the most viable option that you should opt for in the given situation. This advice would strive to
identify the legal issue that has been arising from the present situation. It would mention the relevant legal
principles relating to the connected with the identified issues. The advice would contain a section
applying the legal principles with the facts of the situation. It would also provide for a conclusion that
would be arrived upon under the light of the given discussion. The concerns that would be addressed in
the instant letter is the residency of Nguyen in Australia in the year 2017 and in the year 2019. It would
also analyze the aptness of both the options relating to self-amendment and audit for the purpose of
resolving the issue relating to Nguyen.

TAXATION2
Issue
Whether Mr. Nguyen is a resident of Australia for the purpose of taxation in the year 2017 and
2018. Whether he should accept the ATO offer of self-amendment or should enter into audit for the
purpose of defending his case.
Rule
There has been a definition provided under the ITAA97, s 995-11 any person who can be brought
under the purview of the ITAA362 as a resident would be rendered as a resident in Australia. The
definition of resident in Australia as provided in ITAA36, s 6-13, mentions for four assessments that are to
be satisfied for the purpose of considering a person an Australian resident for the purpose of taxation. The
included assessments are the resides test, the domicile test, the 183-day test and the superannuation test.
The individuals needs to actually reside in Australia for the purpose being assessed as a resident
in Australia for the tax purposes. The expression resides has no clear definition in the legislation and is
required to be taken with respect to its normal concepts. This implies the person to be living in Australia.
As per Tax Ruling 98/174, there are certain factors that a person is required to satisfy to be assessed as a
resident in Australia for the purpose of taxation. The first factor is the extent of time for which the
individual has been present. The second factor is the family and employment bonds of the individual. The
third factor is the location of the assets belonging to the taxpayer and the maintenance of the same. And
the fourth factor is the living arrangement and the social surroundings of the tax payer. As per the extent
of residency is concerned, it has been contended in that FC of T v Applegate 79 ATC 43075, the duration
of the stay of a person should not necessarily be forever but it needs to be considerably long. In this
proceeding, any period beyond three years of stay overseas is enough to render a person non-resident in
Australia given he has an intention to not return to Australia.
1 The Income Tax Assessment Act 1997, s 995.1
2 The Income Tax Assessment Act 1936
3 The Income Tax Assessment Act 1936, s 6.1
4 Tax Ruling 98/17
5 FC of T v Applegate 79 ATC 4307