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Fred's Applicability Case Study

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The report aimed to discuss whether Fred is a resident of Australia and should be taxed from all sources of income or only from income sourced in Australia. Applicable case law and legislation were presented to support the evaluation.
ITAA 1997 Section 995-1 provides that the meaning of an “Australian resident” is defined in ITAA 1936 Section 6 (1), which sets out different criteria for determining the residency of individuals and companies. There are four tests to ascertain that an individual is a resident or not. An individual need only to satisfy one of these tests to qualify as a resident for tax purposes. These tests are the ordinary concept test, the domicile test, the 183-day day test and the superannuation test.
To assist in determining the residence of a person under the ordinary concept, the following factors need to be considered: physical presence in Australia; if the person is a visitor, the frequency, regularity and duration of visits; the purpose of the visits to Australia and abroad; the maintenance of a place of abode in Australia for the taxpayer’s use; the person’s family business and social ties; and the person’s nationality.
In the case of Levene v IRC, the House of Lords agreed that the taxpayer …show more content…

The Court concluded that a “permanent” place of abode did not mean one that was everlasting forever but rather one that was permanent in relation to a particular year of income. While the taxpayer might plan to return to Australia at some point in the future, his abode in Vanuatu was a permanent one until he made a decision to cease to reside in Vanuatu and to return to Australia. The approached taken by the Federal Court in Applegate also applies in FCT v Jenkins, where the Court concluded that the taxpayer had a permanent place of abode outside Australia during his time in Vanuatu. The taxpayer was not a resident for the tax years in

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