LAW5230 Introduction to Taxation Law

Task:

Part A 

Catherine is 22 years old and was born in Cardiff, Wales. On 20 August 2018, she arrived in Brisbane on a 12-month working holiday visa. Prior to arriving in Brisbane Catherine had always lived with her parents in Wales. 

Required:

Discuss with reference to legislation, case law and/or rulings whether Catherine would be considered a resident of Australia for tax purposes for the income year ended 30 June 2019. You do not need to consider the temporary residency rules.

Catherine provides you with the following financial information for the year ended 30 June 2019:

Salary from employment in Wales prior to 20 August 2018 equivalent to AUD$5,500.

Salary paid by her Australian employers for work at the café, hotel and cattle station AUD$36,000.

A $250 prize for winning the annual pie-eating contest in Cloncurry, Queensland.

Interest on her Australian bank account of $50.

Interest on her bank account in Wales equivalent to AUD$180, from which $20 withholding tax had been deducted by the bank prior to crediting her account on 1 March 2019.

$350 from the sale of excess clothing, sleeping bag and other personal items on eBay in June 2019 prior to leaving Australia.

Required:

i) Assuming that Catherine is a resident of Australia for tax purposes for the whole year ended 30 June 2019, what amount should she include in her assessable income in Australia?

ii) Assuming that Catherine is a foreign resident (non-resident) of Australia for tax purposes for the whole year ended 30 June 2019 what amount should she include in her assessable income in Australia?

You should state and apply any relevant source of income, derivation, general income rules and cite relevant legislation, case law and rulings in answering approaching this question. 

Part B

You are required to prepare a written research assignment that addresses one of the provided topics below. The purpose of the task is for you to demonstrate high level critical reflection and analytical reasoning skills in the context of the application of Australian taxation law and taxation law policy. You must undertake academic research which demonstrates the following:

An in-depth understanding of how the specific tax law applies,

The policy context of the law and if relevant how other jurisdictions deal with similar issues,

Critical reflection as to whether the law achieves its stated purpose, aligns with principles of good tax policy or could be improved/amended. These critical reflections should be supported by the research you have undertaken as well as your own independent thought.

Topic Choices

1. Australia’s Residency Rules

Briefly outline the current tax rules for the residency of individual taxpayers in Australia;

Discuss and critically evaluate the Board of Taxation’s recent suggestion to amend the residency rules, as well as recent case law;

Compare the Australian rules to the rules in one other country;

Conclude as to whether the current rules should be changed.

2. International Tax Avoidance

Briefly outline why the avoidance and/or minimisation of tax by large multi-national corporations is of great concern to Governments and tax administrators;

Discuss and critically evaluate at least one common method multinational corporations might use to avoid tax in Australia and a current strategy implemented by the Government that is used to prevent this.

Compare the Australian rules to the rules in one other country;

Conclude as to whether the current rules should be changed.

3. Negative Gearing

Briefly outline what is meant by negative gearing and how the Australian tax system treats negatively geared investments;

Discuss and critically evaluate the extent to which tax-deductible negative gearing impacts upon savings and investment decisions, and recent election policies to amend the current rules;

Compare the Australian rules to the rules in one other country;

Conclude as to whether the current rules should be changed.

4. Small Business CGT Concessions

Briefly outline the Small Business CGT Concessions in Australia;

Discuss and critically evaluate the Small Business CGT Concessions in Australia, including the overall policy objectives and your evaluation of whether regime currently meets these objectives;

Compare the Australian concessions to the concessions in one other country;

Conclude as to whether the current rules should be changed. 

5. Superannuation Tax Concessions

Briefly outline the changes to Australia’s superannuation tax concessions effective from 1 July 2017 and the purpose/policy intention of those changes;

Discuss and critically evaluate whether the recent changes are equitable and an improvement to the prior system;

Conclude as to whether the additional reforms to Australia’s superannuation tax concession system are required.