LAW5230-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.

Catherine had worked in Cardiff prior to leaving for Australia and had been saving for her travel. She did not own any significant assets in Cardiff, only personal possessions such as clothes and a few electronic items. She left most of this with her parents while she was in Australia.

Catherine stayed in a hostel in Brisbane for 2 weeks after arriving, visiting the Gold Coast and Sunshine Coast and other tourist attractions. She then moved into a shared house with other working holiday makers, and worked at a café and hotel in Brisbane city as a casual employee.

As she was required to work in a rural area as part of her visa requirement, in February 2019 she travelled to central Queensland to work on a cattle station for two months. When she returned to Brisbane in April 2019 she went back to live in the same share house.

On 16 July 2019 Catherine decided to return to Cardiff and moved back into her parents’ house. She wanted apply for a working holiday in Canada and started working and saving for her next adventure. After six months she started travelling again. 

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. 

Part B

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

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

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

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

d.Interest on her Australian bank account of $50.

e.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.

f. $350 from the sale of excess clothing, sleeping bag and otherpersonal 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 Aus