Case Study 1: Residence and Source
Fred is an executive British corporation which seems to be specialized in the management consultancy. He has come to Australia for setting another branch of its own company. It was uncertain for how long Fred would stay in the copy in the country but though he started leasing of the residence in the Melbourne for 12 months. But during the mean time Fred felt ill and then he decided to return back to Australia (Boxer, 2008).
The laws that are indicated as per the Australian Taxation office with following the conditions with regarding the verification of the Australian Citizenship of an individual are as follows:-
- Conducted business by him/her in Australia
- If the connection is made between the individual with the country along with the consideration of the individuals residing in Australia.
- If the individual come to Australia with his/her own family
- Any property owned by the individual (Hogan, 2012).
In this case, Fred is not a permanent resident of Australia. His stay might have been uncertain with creating the uncertain at the beginning and henceforth the completion of 12 months staying in the beginning and thereby becoming citizen of Australia cannot be fulfilled according to the law. He had been deriving the income from the rent of the house at UK. The investments are made in the France with the consideration of the case study (Hefferan and Boyd, 2010). But the case study does not depict the bank account opening in Australia. Henceforth the earnings are supposed to be depicted in the accounts that Fred has already made. Henceforth it does not meet the criteria or the condition required and approved by the Australian Taxation office. Since Fred is not a resident of Australia, so he is not liable to pay taxes for the income made.
This case study represents the tax application for Fred in Australia. It depicts that Fred is not liable for paying taxes in Australia because he is not the permanent resident of Australia and for this reason, taxation rule cannot be applicable on Fred.
Case Study 2: Ordinary Income
I. Californian Copper Syndicate Ltd v Harris (Surveyor of Taxes) (1904) 5 TC 159
In this case study of “Californian Copper Syndicate Ltd v Harris (Surveyor of Taxes) (1904) 5 TC 159”, the main objective is to get hold of the land containing copper. The verdict stated by the court that the land provided for mining copper cannot be used for any other purpose and on the basis of this reason the selling of the land was considered as a general reason with considering the perspectives of the tax payer’s company (Barkoczy et al., 2012). The verdict was provided as per the taxation law of Australia. Henceforth the company need to pay tax on the nature of the income made which is accessible.
II. Scottish Australian Mining Co Ltd v FC of T (1950) 81 CLR 188
In this case study, the mining organisation is taken into consideration that was acquired for the purpose of mining on which the organisation has already started mining process. After some time, the organisation decided to sell the land to someone else with the removal of coal from the land. The organisation constructed houses and the building for earning more money and thereby the roads are also developed by the organisation. As per the verdict created by the court, it proves that the earning made by the organisation with mining should not be measured (Meagher and Agrawal, 2008). Therefore the earnings made by the company seem to be capital in nature. For this reason, the income that will be made by the company after selling the land is taxable in nature.
III. FC of T v Whitfords Beach Pty Ltd (1982) 150 CLR
In this case study, the case depicts that the company seems to be intended for getting a plot at the beach of the Whit Fords. After some years, the problematic shares of the company are sold out and henceforth the shareholders divided their land among themselves. The verdict of the court helps in this case providing appropriate justifications with providing the land to the shareholders from which they can easily generate profit with selling the land (Thomas, 2010). For this reason, the fulfilment of the condition of the court also helps in the generation of the profit with the fulfilment of the condition of court. The final justice was made by the Gibbs CJJ which states that the action of the taxpayer is depicted for the business of land development.
IV. Statham & Anor v FC of T 89 ATC 4070
In this case, the tax seems to be measured and adjusted in a wrongful manner and as a result of this, the court decided that the commission has to work accordingly wit adjusting the income of the estates.
V. Casimaty v FC of T 97 ATC 5135
In this case no intension of making profit is made from the deal undertaken. The problem that was focused which deals with the explanation of the profit made after selling land is taxable or not. According to the assessment of the tax commission, the income made by the taxpayer seems to be taxable under the section 25(1) of the ITAA 1936 (White, 2009). Therefore as a result, the ordinary income tax is bounded to be paid for selling the land.
VI. Moana Sand Pty Ltd v FC of T 88 ATC 4897
In this case, the company seems to be dealing with the business of sand where the company owned a plot for getting the sand. The company seems to be waiting for the rise in the price of the land for which the company could sell the land with incurring more profit. The issue that is indicated in this case is paying of the taxes with selling the piece of land owned by the company. The verdict provided in this case depicts that the land can be sold for the commercial purpose to anyone the company want (Woellner, 2012).
VII. Crow v FC of T 88 ATC 4620
This case depicts the famer and its position with considering the perspectives of paying taxes to the government. The problems that are depicted in this case of selling the land to the farmer and henceforth the deal seem to be aided with increasing the scheme for the farmer for taking into consideration.
VIII. McCurry & Anor v FC of T 98 ATC 4487
Here in this case, it is stated that the land owned by the two brothers and a few houses had been built in that land. The fulfilment of the purpose depicts the renovation of the land which can be created with the removal of the houses (Woellner, 2013). The issues here in this context are focused regarding the payment of the taxes for the plot of the land. As per the verdict made by the court, it depicts that the brothers are not liable for the particular piece of the land with depicting the verdict of the court.
Barkoczy, S., Rider, C., Baring, J. and Bellamy, N. (2012). Australian tax casebook. North Ryde, N.S.W.: CCH Australia.
Boxer, A. (2008). TAXATION IN AUSTRALIA*. Economic Record, 41(96), pp.639-649.
Hefferan, M. and Boyd, T. (2010). Property taxation and mass appraisal valuations in Australia – adapting to a new environment. Property Management, 28(3), pp.149-162.
Hogan, L. (2012). Non-renewable resource taxation: policy reform in Australia*. Australian Journal of Agricultural and Resource Economics, 56(2), pp.244-259.
Meagher, G. and Agrawal, N. (2008). Taxation Reform and Income Distribution in Australia. Australian Economic Review, 19(3), pp.33-56.
Thomas, G. (2010). Cornerstone law series. [Adelaide]: Law Society of South Australia.
White, R. (2009). Cornerstone law series. [Adelaide]: Law Society of South Australia.
Woellner, R. (2012). Australian taxation law select 2012. North Ryde, N.S.W.: CCH Australia.
Woellner, R. (2013). Australian taxation law 2012. North Ryde [N.S.W.]: CCH Australia.