Andrew McSwington is a highly regarded MLB prospect. During the American off season he first travelled to Mexico to play in the Fall League for 2 months and then decides to come to Australia and play in the Australian Baseball League in December, January and February to play for the Adelaide Chomp. He signs the contract stipulating he is to be paid $45 000 for the 3 months in Adelaide and joins the team shortly after. The contract states he is to be paid monthly into a bank account in the Turks and Caicos Islands Andrew is impressed with Australia and decides to purchase a home unit at Glenelg. His plan is to use it as a base during the home and away series and rent it out for the remainder of the income year.
Discuss with reference to relevant case law:
- Whether Andrew is liable for taxation on the $45000 for his baseball skills
- Whether Andrew is liable for tax on the rental income received during the balance of the year