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Is Basil a resident of Australia for tax purposes?

1. See the Instructions and Assessment Criteria in the Course Description and make sure you follow them!

2. Please answer all parts of the question
3. Attached to this document is a Checklist to be filled in by you and attached to your essay/assignment. Read this now before you start your research. If you have followed this checklist, there is a good chance you will do well.

4. All work presented for assessment in this course must comply with the
format outlined in the University’s Presentation of Academic Work
publication, available from the bookshop or on-line at

5. All essays must be accompanied by a signed official cover sheet (‘Plagiarism Declaration Form’), available at www.ballarat.edu.au/ard/business/student_info_webct.shtml and lodged as appropriate for your campus.

6. You MUST reference in the body of the essay every time you use information from other people. This requires you to keep a track of where you are taking information from and then writing the reference up. You should use the Harvard/APA style; and use the University’s new Presentation of Academic Work. The Library’s website also has a citation style guide site. If you plagiarise (intentionally OR unintentionally) you will be given zero: see Regulation 6.1.1 for more details.

7. LAST DUE DATES: … Please check with the Course Description for details of where and when to submit your assignment. If you need an extension you must ask for one BEFORE the due date (unless this is impossible).

8. The assignment should not exceed approximately 2000 words.

9. The assignment is worth 25%.

Part A

Basil arrived in Australia on 28 August 2011 from his usual domicile in England. He obtained a working visa that permits him to work in Australia for three years. He is a specialist in information technology and is employed by Systems Ltd, a resident UK company that has secured a contract in Australia. His wife Sybil and two school aged children accompany him. For the present he proposes to rent accommodation in Adelaide but he may buy a property if he likes the country and spots a real estate bargain.

Basil is paid a base salary of $12,000per month plus a rent subsidy of $600 per month. Half of the net (after tax) salary is credited to an Adelaide bank account, the balance to an account at the Bank of England. He is also provided with a fully maintained motor vehicle for his private use. His employer pays half his phone account. The amounts are $A125, $A460, $A440 and $A475 in September, December, March and June, respectively.

His England home, owned jointly with his wife Sybil, is rented out for $A800/month, in advance on the 1st of every month, and paid into the England bank account.

In December 2011 Basil received a performance award from his employer consisting of a fully paid trip for the family to Hong Kong. The trip is valued at $A10,000, is non-transferable and must be taken before August 2012. It has not been taken by June 30, 2012.

In October 1990 Basil acquired a parcel of speculative shares in an English company for $A14,000. The price had been not changed for some time and then in March 2012 suddenly jumped to $A23,000 and Basil sold the shares immediately. In November 2011 he purchased Australian shares for $8,250 and sold them in April 2012 for $6,400.

At an auction in Adelaide in December 2011 he purchased four dining chairs that Sybil liked. The total price was $550. Later, a friend visiting their house saw the chairs and was sure they were Queen Anne antiques. He contacted a collector who inspected the chairs and offered Basil $14,000.

1. Is Basil a resident of Australia for tax purposes? [You should consider the definition in ITAA36 s6(1), the evidence and the leading authorities (Applegate and Jenkins cases).] Suggested maximum: 500 words.

2. Assume Basil is an Australian resident. Advise him of his tax position and the assessability of the following: [Approx 1000 words]
– salary
– rent subsidy
– motor vehicle
– phone account
– holiday
– English rent
– gain on English shares
– Australian shares
– chairs.

Part B
[Approx 500 words]
1. Refer to the decisions in FCT v Rowe (1997) 35 ATR 432; 97 ATC 4317 and FCT v Stone (2005) 59 ATR 50; 2005 ATC 4234:
(a) In your own words, briefly outline the facts and issues in each case.
(b) Explain why the government grants to the taxpayer in Stone were income but the grant in Rowe’s case was not.

University of Ballarat – School of Business


Please check that you have done the following. Tick the boxes to show you have!

• Submitted an essay that is your own work. (You may discuss the essay topics with others but you cannot copy another’s work, give your work to someone else to copy, or work closely with another student on how to structure or write the essay.)

• The assignment does not exceed 2000 words long (excluding abstract, references, bibliography).

• Read and tried to address the criteria in the Course Description.

• Read and addressed the issues raised in the University’s Presentation of Academic Work

• Read Regulation 6.1.1, Plagiarism and asked questions if you are unsure about what it means.

• Referenced direct quotes (use quotation marks or indent) AND summarising from another person’s work in the body of the essay. (This includes internet sources).

• Indicated what referencing style you have chosen Harvard/APA and USED IT.

• Answered all parts to the question.

• Used headings (even though this is not a report, headings are encouraged to assist structure and flow).

• Proof read the assignment for spelling, punctuation and grammar errors.

• Where required, used relevant sections of legislation, legal rules/principles

• Where required, used cases to support your points or arguments. These cases can be obtained from textbooks, or the CCH online libraries, articles found via AGIS PLUS TEXT database etc.

• Put case citations in the body of the work as well as listing the case in the List of References.

• Discussed the issues as required and put arguments and gave your view.

• Used a range of resources.

• Included a title page with your name, student number, course code and name and lecturer’s name.

• Have a margin so comments can be added; put page numbers and your name and student number on each page.

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