What are the australian tax consequences

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Reference no: EM131301208

On 10 July 2014, Jim Morris was transferred to the Tokyo office of his company, Worldwide Australia Ltd, for five years. His wife Mandy accompanied him to Tokyo. In Tokyo they lived in an apartment owned by the company and leased their Melbourne residence.

While residing in Tokyo Mandy borrowed $100,000 from Westpac Bank on 1 December 2014, to fund the purchase of $50,000 shares in Worldwide Australia. During the 2014/2015 tax year Mandy received $10,000 as her share of rental income from the lease of their Australian home, and $2500 in fully franked (taxed) distributions from Worldwide Australia.

She incurred no expense in deriving the rental income, but her interest payments on the Westpac bank loan amounted to $5,550.

What are the Australian tax consequences of these transactions for Mandy Morris?

Explain and justify your answer relevant case laws. Detail discussion is required

Reference no: EM131301208

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