Taxation Essay

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1. Under Section 6(1) of ITTA 193, in order to be count as a resident of Australia for taxation purposes, Fred needs to satisfy at least one the following residency tests: the resides test, the domicile test, the 183 day rule and the superannuation test. Although Fred and his wife were in Australia only for 11 months and despite having a home property in London they are considered Australian residents on the basis that they were residing here and also worked the same job / activity that they have done back in England. The fact that his son is still doing college in England and Fred returns due to his illness does not change the purpose of the test. The family shows a behaviour consistent of residing here the moment they arrived, it could be shown by Fred setting up a branch of his company in Australia, Fred rents out a family home, obtaining a residency visa for 12 months and his wife engaging in a normal activity as she did in England. His earning of interest from the investments he has in France will be taxed In Australia. In the reside test the nationality is irrelevant in determining where you are residing and If Fred has a dual citizenship there could be more tax agreements that could determine country of residence for tax purpose and the country that has rights to taxing his income. The superannuation test covers commonwealth government employees and states you are an Australian resident if you are: “member of the superannuation scheme established under the Superannuation Act 1990 or “ an eligible employer for the purpose of the Superannuation Act 1976”. Clearly It was not mention in our case whether Fred was a member of the above group or Act, therefore the test is invalid. The domicile test determine permanent home considered by law and usually more than just residence. For someone who has to move from one place to another and does not have a place to

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