I have a tax law assignment.
Assignment
Robert and Kate Andrews, two Australian citizens, have been living in New Zealand since 1 February 2011.
Robert went to New Zealand to start up an office in Auckland for his employers. When he left Australia, Robert took with him his wife, Kate and their two daughters Emily and Jessica, and he rented the family house in Nerang on the Gold Coast.
Robert was not sure when he would come back to Australia as the term of his assignment was indefinite. However, after a promising start, business in Auckland did not fare as well as predicted and the office was closed. 15obert and his family decided to return to Australia where they arrived on 15 January 2015.
For the few weeks after their return to Australia, Robert and his family stayed in their family house in Nerang.
During that period, Robert took up a few contract jobs while he was looking for a long term employment opportunity.
In the meantime, Robert became aware of a Real Estate business opportunity in Byron Bay on the northern coast of New South Wales. After considering alternative options, Roberts decided to take the plunge and acquired the business for $350,000. The contract was signed on 25 March 2005.
Information regarding the 2015 Income tax year Business
The data related to the real estate business for the period 1/4/2015 to 30/6/2015 is as follows:
Income:
|
Commissions received on sales
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$80,000
|
|
Rental property agent fees
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$45,000
|
|
Total income
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$125,000
|
The above figures correspond to income earned and credited to accounts. All rental property agency fees were collected on 30 June 2015. Among commissions, an amount of $12,000 relates to sale contracts on two properties which were signed in late June. The contracts will be settled and the commissions received on 10 July 2015.
Personal Income Foreign source income
While living in New Zealand, Robert received the following income from New Zealand sources:
Employment income : NZ $30,000 (equivalent AU$ 27,000), from which tax of NZ$8,000 (equivalent AU$7,200) was deducted
Interest from savings account : NZ$990 (equivalent AU$891) net of 10 % withholding tax
After Robert's return to Australia, a further NZ$450 (AU$405) was credited to his bank account in New Zealand. This amount is net of a 10% withholding tax
Australian source income
Employment income while on the Gold Coast: Gross pay: $8,000; PAYG amounts deducted: $1,200
Robert also got injured while working on the gold coast and got compensation amounts from his employer attributable as follows:
- Loss of wages: $1,000
- Personal injury - pain and suffering - $500
Robert has always been a member of the Australian Army Reserve Force. When he came back to Australia he immediately recommenced his duties as a reservist member. For the period ended 30 June 2015 he had received $1,500 as payments for do duties as a reservist.
On 27 June 2015 Robert went to the Gold Coast Jupiters casino and won $25,000.
Required:
1. On the basis of the facts provided in the case, determine whether Robert was a resident of Australia for tax purposes during the 2015 financial year. If so, indicate for which period, Robert is likely to be considered a resident.
2. Please also quantify and disclose the total amount that would be included in Robert's assessable income in Australia for the 2015 financial year.
In your answer you must provide references to the relevant sections of the ITAA 1936 and ITAA 1997, case law, Tax Rulings or Tax Determinations.