Problem
Anna is a resident of Australia for tax purposes and Sarah is a non-resident of Australia for tax purposes. They are partners in a partnership. Their shares of the partnership profits and losses are 60% and 40%, respectively. During the income year of 2021/22, the partnership derived the following income:
• Interest income from an Australian bank account: $30,000
• Interest income from an overseas bank account: $18,000
Task
Calculate the net income of the partnership under s 90 of the Income Tax Assessment Act 1936 and explain how that amount would be allocated and assessed in the hands of Anna and Sarah under s 92 of the Income Tax Assessment Act 1936.