Reference no: EM132155546

NTERNATIONAL TAX FUNDAMENTALS Case Study -

Dr Peter Wong is an Australian pathologist employed by Apex Laboratories Ltd (Apex) in Sydney since 2010. In June 2015 he accepted a 2-year research fellowship at a New York university, starting from 01 July 2015.

Willing to keep Dr Wong as an employee during his time overseas, Apex offered him a part-time position, working remotely from New York and requiring him to travel to Sydney for project meetings every 8 weeks.

After accepting the new work conditions, Dr Wong leased his Sydney apartment, sold his car and moved to New York on 1 July 2015. Since then, his income consisted of the following:

- Salaries of $50,000 per year paid by Apex into his Australian bank account on a monthly basis;

- Dividends of $3,000 from a US company, received on 1 October 2015 (no withholding tax was applied in the US);

- Interest on his US bank deposits amounting to $180 (net of 10% US withholding tax); received on 1 September 2015;

- Fully-franked dividends of $2,000 from an Australian company, received on 1 October 2017; and

- Rents of $20,000 per year from his Sydney apartment paid in monthly instalments into his Australian bank account.

In December 2015, the New York university offered Dr Wong a full time research position with an annual salary of $100,000 plus travel allowance of $10,000 paid in January each year, as well as sponsorship for a permanent residency visa. Dr Wong accepted the offer and on 1 January 2016 he resigned from Apex. His Sydney apartment remained rented at the same price on a continuous basis until 30 June 2018.

QUESTION A - Considering the facts above, advise Dr Wong on his residency status for the period between 1 July 2015 and 30 June 2018, applying legislation, case law and relevant tax rulings to support your answer.

QUESTION B - Based on your answer to item (a) above, calculate his Australian assessable income for the years 2015/16, 2016/17 and 2017/18, stating applicable legislation and relevant notes.

SUPERANNUATION Case Study -

Joseph Conti, an Australian resident, has been employed by Build Ltd, an Australian construction company, since 1 July 1980. Due to a downturn in the economy, Build Ltd was restructured and Joseph was offered an early retirement package.

Joseph accepted the package and retired on 30 June 2018, aged 58. Among other benefits, on that date he received a lump sum payment of $500,000 from his complying taxed superannuation fund. His latest superannuation account statement showed the following information:

• Balance on 30 June 2007: $300,000 (including $33,313 pre-July 1983 component)
• Balance on 30 June 2018: $500,000 (including $50,000 undeducted contributions made between 2010 and 2015)

Question 1 - On the basis of the above information, calculate Joseph's maximum tax payable in relation to his superannuation lump sum benefit, stating supporting legislation for each step of the calculation and excluding Medicare Levy.

Note - Case study 1 has Question A and B and Case study 2 has Question 1. There is no word limit to answer.