Residence And Source For Taxation: A Case Study Essay.

Case study 1: Residence and source

Kit is a permanent resident of Australia. He was born in Chile and retains his Chilean citizenship. Kit spends most of the year working off the coast of Indonesia on an oil rig for a United States company. He was recruited for this job in Australia and signed a contract with the company here. For the last four years, Kit’s wife has lived in Australiawith their two children. They purchased a home in Australia three years ago. Kit and hiswife have a joint bank account with Westpac Bank. Kit’s salary is paid directly into his account. All of the family’s other investments, including a share portfolio that generates dividend income, remain in Chile. Kit gets one month off from work every third month and, on these occasions, he meets with his family either in Australia or on holidays around South America (usually in Chile where his parents reside).

Discuss whether Kit is a resident of Australia and how his salary and investment income would be taxed

Case study 2: ordinary income

Explanations of the respective outcomes reached by the courts in the following cases which all involving sales of land:

1. Californian Copper Syndicate Ltd v Harris (Surveyor of Taxes) (1904) 5 TC 159
2. Scottish Australian Mining Co Ltd v FC of T (1950) 81 CLR 188
3. FC of T v Whitfords Beach Pty Ltd (1982) 150 CLR
4. Statham & Anor v FC of T 89 ATC 4070
5. Casimaty v FC of T 97 ATC 5135
6. Moana Sand Pty Ltd v FC of T 88 ATC 4897
7. Crow v FC of T 88 ATC 4620
8. McCurry & Anor v FC of T 98 ATC 4487

Case study 1: Residence and source

The study of the undertaken case provides clear evidence that though Kit is holding a Chilean Citizenship, he must be considered as an Australian resident according to the laws of Australian Tax office. He is working in an American company and posted in Australia (Chow, 2015). However, most of the time he works in Indonesia but he posted in Australia. His wife is residing in Australia from last four tears and Kit frequently visits Australia. He bought a home in Australia three years ago. He has a joint bank account with his wife in Westpac bank Australia and his salary is paid directly into this bank account. In every third month Kit gets one month’s holiday when he meets with his family in Australia (Kew and Watson, 2012).  In this case study it is noticed that however, Kit is employed in an American Company but as he is posted in Australia from the last four years thus as per the Australian Taxation Act, he is considered as the Australian resident for the taxation purpose. Besides this it is also known that kit is decided to make permanent citizenship in Australia this also make him Australian resident for the tax purpose. Apart from this, the bank account of Kit and his wife in Westpac Bank in Australia is also a considerable reason that makes him Australian citizen for tax purpose. As his wife is residing in Australia for last four years that also make him Australian resident for tax purpose. His bank account in Australia is his salary account that also a good reason for assessing Kit as an Australian resident for tax purpose. Apart from this, from the case study it is also observed that Kit has bought a home in Australia in three years ago and his wife is residing there from the last three years (Horngren, 2013). As he occupies a property in Australia, means he has a property in Australia this also provide adequate reason for assessing Kit as an Australian resident for tax purpose. It is evident that wife of Kit along with his kid is residing in Australia from last four year and Kit also wish to settle permanently in Australia this also provide a significant reason for assessing Kit as an Australian resident for tax purpose (Barker, 2007). According to the Australian Tax Office (ATO) there are few rules that confirm the residency of an individual. Some of them are as follows:

• If an individual frequently visit Australia and stay in one place over three months, then that individual is considered as the Australian resident for tax purpose
• In case of an individual possess a property in Australia then also that individual can be considered as the Australian resident for tax purpose
• In case any individual is planning for permanently settle in Australia then also the individual is considered for the Australian residency for taxation purpose.
• In case of bank account especially salary account of an individual in an Australian bank then also the individual is considered as the Australian resident for tax purpose.
• In case of any individual’s spouse is residing in Australia for long period then also the individual is considered for the Australian resident for tax purpose (Harvey, 2009).

In case of Kit most of the criteria has been fulfilled that assess him as an Australian resident for tax purpose, hence he has to bear tax for all his income from the salary of the American company must be assessed as ordinary income and he must pay income tax for the income he made from the American company. However, his Chilean investment would not be considered as taxation purpose in Australia as he is yet not an Australian citizen (Engdahl, 2011).  This is because of his dual citizenship in Australia and Chili he has to pay tax in both countries and for the investment in Chili he has to pay tax in Chili.  

Case study 2: ordinary income

As per the case study is undertaken, it explains the issue of acquiring the land which is being used for the purpose of obtaining copper. The enhancement of the study is being made by showing all the appropriate justifications which is being used for showing the appropriate explanations of the work. The appropriate mitigation of the issues is being made by showing the anticipation of the trading processes which is being used for showing the appropriate verdict and also the explanation is being provided is depicting the generation of the income in considering the future factors (Viney and Phillips, 2015). Therefore the retention is being made by showing the appropriate explanation of the study and also it illustrates the generation of the income which is being made by showing the revenue on the sales. Therefore the conduct is being made by showing the illustrations which is being made by considering the approximation of the work and also illustrating the characteristics of the tax payers.

As per the case study is undertaken, it is depicted to be illustrating the case of the coal mining which is being undertaken in the form of showing  the explanation of the procurement cases. It simply describes the removal of the coal from the land and also the period of the time is being considered which is showing the appropriate explanation of the case study. The company then decided to part of the land for the purpose of using it in the business of the construction (Waterston, 2006). The company then started to build houses and also started to construct the roads for the purpose of hiding the values of the land. It is also explaining the issue which is related to the property is dealing with the measurement of the taxes by which the enhancement of the study can be easily made.

As per the case study is being undertaken, it shows the appropriate measurement of the work which is being shown to be depicting that the taxpayer’s values are added by showing the enhancement of the part and also the enhancement of the study is being undertaken on the basis of the issues which is being identified regarding the beach of the Whit fords (Krishna, 2015). The land regarding the frontage of the beach is being explained as per the study is being made which is showing the reasons for the development of the issues. The structure is showing the proper enhancement of the structures regarding the enhancement of the work which must be mitigated by showing the appropriate construction of the study and also the explanation is being shown as per the study is being undertaken in this case (Prince, 2016). The latest shareholders are depicted to be parting the land and also the trading of the property is depicted to be much improved as per the explanations regarding the property is being undertaken.

The case study is depicted to be related to the income tax which is being estimated in an appropriate way for the purpose of adjusting the inappropriate and the invalid ways. Thus the adjustment on the income can be easily made by showing the revision of the decisions made by the commissioner and also the adjustment of the income of the estates.

Criteria for determining Australian residency for taxation purposes

The scenario is depicted to be showing the explanation of the missing the intentions of the profit generating and also the explanation of the study are being made by showing the enhancement of the study. The intention is being provided by showing the generation of the profits for the betterment of the selling of the goods as it is showing the part which is needed to be taxed (Schroeder, Clark and Cathey, 2011).

The following case study is showing the appropriate illustrated that are related to be business of the digging of the sand from the land acquired by the organization. It is depicted to be showing the handover of the land to the other party while the cost of the land is depicted to be increasing and also the main reasons behind this is being illustrated to be showing the returns that will be coming from the investments and also the organization is depicted to be getting the huge amount of the profit as considered for the longer period of time (Libby, Libby and Short, 2014).

The determination of the case is dealing with the farmer who is also illustrated as the taxpayer as it is explained in this case study. The appropriate explanation of the case study and also the enhancement of the study are being made which is being illustrated to be showing the collision regarding the peace of the land as acquired by the farmer. The ending of this deal is being made by showing the appropriate proposal for the case as explained in this (Mott, 2008).

The defined land is being acquired by the owner of the land who is depicted to be involved in the case of showing the appropriate justifications as undertaken in this case. This simply defines the enhancement of the study which is revolving round the conflicts as observed in this case (Lakshmanan, 2015). The conflict is regarding the taxpaying activities which are included for the betterment of the study and also it helps in explaining the appropriate exemptions that are made regarding the case of the land.   

References

Australian income tax legislation 2013. (2013). North Ryde, N.S.W.: CCH Australia.

Barker, K. (2012). The law of torts in Australia. South Melbourne: Oxford University Press.

Bently, L., Ng, C. and D'Agostino, P. (2010). The Common Law of Intellectual Property. Oxford: Hart Pub.

DZHUMASHEV, R. and GAHRAMANOV, E. (2010). A Growth Model with Income Tax Evasion: Some Implications for Australia*. Economic Record, 86(275), pp.620-636.

Herault, N. and Azpitarte, F. (2014). Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Benefit System Account for the Decline in Redistribution?. Economic Record, 91(292), pp.38-53.

Ingles, D. (2001). Earned Income Tax Credits: Do They Have Any Role to Play in Australia?. The Australian Economic Review, 34(1), pp.14-32.

Miller, J. (2003). Frontiers of family law. Aldershot, Hants, England: Ashgate.

Pearson, G. (2009). Financial services law and compliance in Australia. Port Melbourne, Vic.: Cambridge University Press.

Pearson, G. (2009). Financial services law and compliance in Australia. Port Melbourne, Vic.: Cambridge University Press.

Pope, J. (2005). REFORM OF THE PERSONAL INCOME TAX SYSTEM IN AUSTRALIA.Economic Papers: A journal of applied economics and policy, 24(4), pp.316-331.

Review of sanctions in corporate law. (2007). Canberra: Treasury.

Stokes, A. and Wright, S. (2013). Does Australia Have A Good Income Tax System?. International Business & Economics Research Journal (IBER), 12(5), p.533.

Tiley, J. (2011). Studies in the History of Tax Law, Volume 5. Oxford: Hart.

Tiley, J., Harris, P. and De Cogan, D. (2004). Studies in the history of tax law. Oxford: Hart.

Wijeweera, A. and Siriwardana, M. (2005). The impact of corporate income tax rate on foreign direct investment in Australia and implications for technology transfer. International Journal of Technology and Globalisation, 1(3/4), p.451.

Wood, G., Watson, R. and Flatau, P. (2006). Low Income Housing Tax Credit Programme Impacts on Housing Affordability in Australia: Microsimulation Model Estimates. Housing Studies, 21(3), pp.361-380.