Reference no: EM13376149
Part A
Basil arrived in Australia on 28 August 2013from 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 residentUK 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. Each quarter, interest is credited to the bank account in the joint names of Basil and Sybil.
In December 2013 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 2014. It has not been taken by June 30, 2014.
In October 1990 Basil acquired a parcel of speculative shares in an English company for $A14,000. The price had not changed for some time and then in March 2014 suddenly jumped to $A23,000 and Basil sold the shares immediately. In November 2013 he purchased Australian shares for $8,250 and sold them in April 2014 for $6,400.
At an auction in Adelaide in December 2013 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 for the set.
Required:
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).]
Assume Basil is an Australian resident. Advise him of his tax position and the assessability of the following:
i) Salary and rent subsidy
ii) Motor vehicle, phone account and holiday
iii) English rent
iv) English shares and Australian shares
v) Chairs.