LEGAL ISSUES

Law assignment



Law Assignment

Case study one-Peter

Issue

Whether Pete would be considered as the resident of Australia for tax purposes for the income year ended on 2013, and based on the case facts and calculation which amount would be included in the assessable income.

Law

Pete a qualified chef of New Zealand was offered a 2-month full time position as pastry chef at an exclusive Sydney hotel. Because of his huge experience, the Sydney hotel management endows him with extra ordinary benefits like fully furnished apartment and others till the end of his contract. After completing his contract, Pete got an extension of two months in his visa for holiday purpose. (Thomson, 2013) Now according to Australian tax laws before considering a person resident it is important to seek the answers for the following questions.

What is the residential status of his family, is the person living with his family

Where was the person during the year?

What is the nationality of the person?

Does a person have a property in the country?

What is the plan of the person means does him/she intended to remain in the country?

Is the person living in other country for temporary period and does the absence is for longer than expected period?

Application of above defined situation

Pete a New Zealand resident after accepting the two-month employment offer from an exclusive Sydney hotel and after completion of contract he was able to get an extension of two periods in his visa for holiday purpose. Now the issue that whether peter could be considered as the resident of Australia during the income year 2013 could be addressed by analyzing two similar cases of this nature ,that evidently explain the concept of residency.

The case of federal commissioner of taxation vs. Applegate illustrate that the taxpayer was an employee of Sydney firm that was currently expanding its operations in Pacific region, while working in for the firm tax payer was continuously looking for employment in Vanuatu. The company after expansion expected that taxpayer would return to the country; however, his stay at foreign state was indefinite as he bought a 12-month residency permit plus two-month extension, surrendered the lease of his Sydney house, and was able to get employment as legal practice in Villa. Meanwhile the taxpayer wife visited Australia for the birth of her child and was able to get child endowment, and in MAY 1973, taxpayer returned to Australia for his medical treatment and after finalizing all of his dues, he permanently left the country.

Commissioner of NSW launched a case against taxpayer claiming that taxpayer should be considered as the resident for the taxable year. After hearing the facts, the commission dismissed the case by stating that taxpayer was a non-resident during the relevant period. According to the court, the statement “permanent place of adobe” illustrates somewhat little than complete permanency, and as the imposed tax is calculated on annual basis, the tax residency should be determined on annual bases. The court further disclosed that taxpayer showed no intention to return on the ...