Assignment:
Task
George was born in Canada and migrated to New Zealand at the age of 7. He was a citizen of Canada and New Zealand. In 1990 he migrated to Australia. In 1991 he was living in a house which he had purchased in Sydney in that year. He also invested properties in Melbourne in 1997 and another at the Gold Coast in 2003. In October 2012 he moved to Brunei after taking a job offer to join Snail International Ltd as a chief financial controller with a salary of $120,000 per annum. As part of his remuneration package the company provided him accommodation for 6 months' worth $7,800. He subsequently purchased a house where he lived and in which he intended to permanently reside. In the first 2 months of working in Brunei his salary was banked into his Australian bank account, he then opened a bank account in Brunei.
He sold off the following assets that belonged to him during the year ended 30 June 2015.
No Asset Purchase date Cost Disposal Date Sale Price
1 Shares in Wales Ltd 22 July 2007 $2,000 3 April 2014 $4,000
2 Shares in Blues Ltd 3 May 2008 $3000 5 May 2014 $2,500
3 Investment property in Gold Coast 30 June 2003 $300,000 22 February 2014 $400,000
4 Artwork 4 July 2006 $300 11 January 2014 $1,200
5 Coin set 5 April 2006 $3,000 12 February 2014 $3,500
6 Ford Falcon 11 May 2007 $35,000 2 June 2015 $6,000
7 Camera 6 February 2005 $3,000 5 August 2015 $2,500
Wales Ltd and Blues Ltd are both Australian tax resident companies.
George has a carried forward losses from both general assets of $5,000 and from collectables of $1,000 for the year ended 30 June 2014.
His wife, Maria is a doctor who runs her own practice in Sydney. She remained in Sydney to continue her practice while looking for a suitable doctor to buy out the practice. In March 2015 she managed to sell off her practice and moved to Brunei to join George.
George visited Australia on December 2012 and February 2014 for work purposes. While he was there he stayed in a hotel paid by his employer.
George leased his house in Sydney to his son Bob under an informal agreement for $300 per week. The market rate of the rent is $400 per week. Bob had agreed to oversee George's property in Sydney for the reduced rent.
All amounts are in Australian dollars
Required
1. Advise whether George is a tax resident of Australia for the tax year ended 30 June 2015. You are required to cite the relevant case law and statute in explaining your advice to George.
2. Assuming George is a tax resident, what is his assessable income for the year ended 30 June 2015.
Refer to the relevant case law and statute law in your answer. You must read the presentation guidelines in the subject outline. Your answer should not exceed 3,000 words, excluding the bibliography. In planning and preparing your response you may find the following site useful:
https://bit.ly/FoBAcademic-Writing-Skills
Rationale
This assessment task covers topics 1 to 8 and has been designed to ensure that you are engaging with the subject content on a regular basis. :
This assignment has been designed to assess your ability to:
• gather and integrate your knowledge on the topics covered thus far;
• investigate in depth the cases, rulings and legislation that are fundamental to taxation law;
• demonstrate your ability to apply that knowledge to a hypothetical, practical situation;
• exercise critical and reflective judgment;
• demonstrate your ability to conduct research using provided materials as well as other legal resources;
• develop your written skills; and
• demonstrate time management skills.
Students should be able to identify and apply legislation and case law to the issues identified as well as demonstrate the ability to analyse the issues fully and discuss the application of taxation principles.