Residential Status of John Samples for Students †MyAssignmenthelp.com

Question: Discuss about the Residential Status of John. Answer: Issue: The present issue ascertains the residential status of John for the financial year of 2016. The case study revolves around the issue whether or not John has the intention of staying in Australia for the financial year of 2017. Rule: Domicile Test: The Australian taxation office defines under the Domicile test that an individual will be regarded as the Australian resident if he or she has the permanent place of abode in Australia. An exception to this rule is that unless it is noticed that an individual have their normal place of abode is out of Australia and does not have any intention of taking up the residency in Australia. Citing the reference of Henderson v Henderson (1965) an individual retains the domicile of their origin unless the person acquires another domicile of their own choice[1]. 183 days Test: The Australian taxation office under the 183 days test defines that if an individual is physically present in Australia for no less than six months of one half of the income year either continuously or in breaks will be regarded as the Australian resident[2]. However, if the commissioner established that the person does not intends to take up the residence in Australia and has their place of residence out of Australia. The taxation ruling of TR 98/17 is associated with the determination of residency status of persons that are entering Australia. The ruling is applicable to most the person that enter Australia as migrant, academics teachers, students staying in Australia or visitors on holiday. Section 995-1 of the Act 1936, defines Australian resident as the person who is the resident of Australian. There are events after the year of income may help in ascertaining the residential status of the person[3]. The ordinary concept of the term reside is broad enough to encompass a person that arrives in Australia permanently as the migrant and a person who is residing here for a considerable period of time. The quality and the character of the persons behaviour in Australia helps in ascertaining whether the person has resided in Australia. The judgement of commissioner in Federal Commissioner of Taxation v Miller (1946) stated that the nature of an individuals behaviour in Australia reflects the way through which an individual arranges the domestic and economic affairs as the element of regular order of life. Where there is a regularity of an individuals behaviour before coming to Australia is similar to that of living in Australia will be regarded as the Australian resident even though their existence reflects a routine of commencing their living in Australia. The commissioner in Levene v Inland Revenue Commission (1928) stated that the intention and purpose for being in Australia assist in ascertaining whether the person is living in Australia[4]. A recognized objective such as employment and education may support the objective of living in Australia. In determining the societal and living preparations made by the individual entering in Australia is stated in Inland Revenue Commission v Lysaght (1928). The arrangements reflect the intention or the purpose of existence such as committing to residential lease. The commissioner views of the law that the period of physical presence for a six months represents a considerable time period in ascertaining whether the person behaviour is consistent with residing in Australia. Application: The situations from the case study provides that John arrives Australia on 3rd April holding a visa to study Mechanical Engineering in Sydney University. In respect of Domicile Act 1982 John could be considered as the Australian resident as he has the permanent place of abode outside Australia in UK and holds a UK passport. Citing the reference of Henderson v Henderson (1965) John has retained the domicile of their origin and therefore under Domicile Test cannot be considered as Australian resident[5]. As evident John entered Australia on 3rd April and with respect to 183 days test John has been physically present and residing in Australia constantly or with breaks more than one half of the income year. Because of this John under the 183 days test will be considered as the Australian resident since he has successfully met the criteria. Beside the above test the Taxation ruling of TR 98/17 is also applied to determine the residential status of John. With respect to subsection, 6-1 of the ITAA 1937 John has shifted to Australia with the student visa however; the intention and nature of behaviour signified a manner where John has settled his domestic and economic activities[6]. With reference to Federal Commissioner of Taxation v Miller (1946) an assertion can be bought forward by stating that John will be considered as the resident of Australia since John has expressed the intention of residing in Australia when he undertook a rented apartment and entered into a lease agreement of six months. Following the commencement of semester John landed in a part time job which further reflected the behaviour that are consistent with residing in Australia over the considerable time period. Referring to the case of Inland Revenue Commission v Levene (1928) the period of physical presence demonstrates John behaviour has the necessary continuity, routine or habit that supported the intention of living in Australia[7]. Supporting the evidences from the preceding paragraph a reference to Lysaght v Inland Revenue of Commission (1928) is made where the societal and living preparation undertaken by John concluded his residential status as Australian[8]. The taxation ruling of 98/17 states that no single factor can be necessarily considered decisive since they are interrelated. John arrived in Australia on 3rd April and expressed the interest of living in Australia for the later part of the year. Similarly for the financial year of 2017, as long as John demonstrate the character of living here over the entire period he would be regarded as the Australia resident. Conclusion: To conclude with the discussion from the preceding paragraph an assertion can be stated that John has met the criteria of 183 days Test specified by the ATO and has met the criteria of Taxation ruling to TR 98/17. Hence, John is an Australian resident for both FY of 2016 and 2017. References: Bell v. Kennedy [1868] Buswell v. I.R.C (1974) FC of T v. Applegate 79 ATC 4307 FC of T v. Pechey 75 ATC 4083; (1975) Gregory v. DFC of T (1937) 57 CLR 774 Miesegaes v. Commissioners of Inland Revenue (1957) 37 TC 493 Reid v. The Commissioners of Inland Revenue (1926) 10 TC 673 Udny v. Udny [1869]