Case study 1
Kit was born in Chile; he has the citizenship of Chilean. It is proved that kit is a permanent resident of Australia, so the Australian taxation law is applicable for him. Kit is considered as the Australian tax consideration though is an American employee. Kit spends most of the time working off at America but he has a planning for permanently reside in Australia. Kit’s wife and children is also permanent citizen of the Australia. Before three years they purchased a home in Australia. Kit has a joint account with his wife in a bank of Australia, and his salary was directly paid to that account. All these issues explain that as per the Australian taxation law Kit has the ability to be a permanent citizen of Australia. If any person is the citizen of Australian country then he has to give tax, it doesn’t matter from which country his profession belongs to (Allison and Prentice, 2009). There is also another evident that also shows that kit is interested to have a permanent address in Australia that, kit has many investment and few settlements in Chile. For this reason Kit will be considered as a citizen of Australia and the taxation laws of Australia are applicable for him. If the individual is employed in Australia on a regular basis, it shows that he is interested to live permanently in Australia. In the fact of residency taxable person is prioritize by the Australian law. The taxation department of the Australia treats the residents and the non-resident in different way, so they give so much important to the residential status of the individual. In Australia the resident and the non-residents are charged for the different income. If any person is considered as a resident of Australia then the person will be according to the Australian law, it doesn’t matter anything that what is the person’s source of income. The tax of Australia doesn’t charge the non-resident person for his/her every sort of income. The taxation law of the Australia can charge the person as per the different law but they will not include the income tax with their residential tax (Bhimani and Horngren, 2008). The government of Australia consider tax as the complimentary contribution to the government which includes the income, property and the business also. Taxes are of two types’ direct tax and indirect tax. Majorly 3 rules are followed by the taxation department such as the state, federal and the local rule. The tax of Australia includes few special features like complimentary payment. The Australian government is mainly responsible for the complimentary factor which includes the cost of services taxes. The collections of the taxes are the income for the public, according to the laws of Australia the complimentary payment should be considered as penalties. The taxation department also has their goals; due to the problem of the economic sector, they become unable to pay the appropriate taxes. In the law of Australia, the resident's taxes are better than the tax’s of non-residents. Their tax depends on the worldwide income, so to be an Australia Kit has to pay taxes which are decided for him. The payment of the tax in proper time is become a common problem for all citizens (Chen-Wishart, 2015). When any person come from another place to Australia for establishing any new business or if the per has the plan resident in Australia then the person will be charged under the taxation law of the Australia. The taxation system force the economical factor by including the income tax, incentives and the success supports the market needs and the correction of the imperfections. In the non-residents tax, the person not needs to pay the tax of Medicare. Their taxes are based on their income rates (Duxbury, 2015). In the case of Kit, he has to pay the taxes which are charged for him. Kit has his account in an Australian bank which gives him normal interests. The interests from bank are considered under the capital gain tax. The taxes are charged depends on the universal income.
The following features describe the verification of the citizenship or residential of any person:
- The law will consider a person as a non-resident when the possibility of the person to the country is variable.
- If any person has his family or any business deals in Australia then the person will be considered as a citizen of the Australia (Dauber, 2005).
- When any person come with his family to Australia for any trip or not.
- If the person is a permanent employee of company under Australia.
- If the person has a permanent residential address in Australian then she/he will be considered under the taxation law of the Australia.
- If any person has any bank account in Australia then he/she will be charged for the tax.
- When any person come from another place to Australia for establishing any new business or if the per has the plan resident in Australia then the person will be charged under the taxation law of the Australia (Engdahl, 2011).
The citizenship of a person can be judged by different features which is a part of the residential test. If any person lives in Australia more than 6months then they can be able to fulfilling all the criteria then he/she will be able to pay all the taxes which are charged for him/her. In the case of Kit, he is living in Australia for few years but his family but his family is already the citizen of Australi8a because they live there since the last three years (Horngren, 2013). So kit is considered to pay the tax as the taxation law of Australia and he has the ability to pay the tax bill. According to the laws of Chilean, just because his wife and children lives in Chile he is forced to pay the tax to the government.
Case study 2:
I) Californian Copper Syndicate Ltd v Harris (Surveyor of Taxes) (1904) 5 TC 159
However, the company did not eternally take out copper. Consequently, the company sold out the land or property to other company and expected shares are considered in that company. The primary objective or intention of a group was to get a land on the company's hand which contained copper. This was a common incident of the tax payers business and profits in nature. The intention of the company was to make revenue and income by selling the land in future because the court held that the deal of the land was income very highly rate (MacIntyre, 2016). The business activity and the sale of the land were the outcome level and the normal incidence and therefore quantifiable income also.
II) Scottish Australian Mining Co Ltd v FC of T (1950) 81 CLR 188
The reason that the business of selling the property or the land was not made by the company and was only become conscious about the capital asset to its best advantage because the court detained that the profits or incomes obtained by selling the land or the property were not able to be gauged. After a particular time, all the coal was taken out. After that, the company makes a decision, and they were determined to sell the property or land (McMillan, 2010). Therefore, as a result, the profits or incomes were capital in nature. For the purpose of making it more profitable, the company sub parted and constructs other infrastructure on that property or land. The land was beach frontage which has right to use and a group of persons created or produced the company to purchase of land and also have right to use the beach for the purpose of fishing.
III) FC of T v Whit fords Beach Pty Ltd (1982) 150 CLR
The new shareholders only bought the shares to have power on the land. The objective or aim that the taxpayer would increase, subdivide and sell housing sites at an income. The taxpayer was an organization or a company was included for the reason of obtaining an area of emergent land at the Beach of Whit fords. Thus are it is saved to make it more profitable than the company for constructing in the enterprise. The business activity and the sale of the land were the outcome level and the average incidence and therefore quantifiable income also. The land was beach frontage which has right to use and a group of persons created or produced the company to purchase the ground and have right to use the beach for fishing purpose (Mott, 2008). The objective changed and that it now had a purpose of developing, subdividing and selling the land, rather than a purpose of non-commercial investment each of the courts detained that at the time when the new shareholders obtained the control of the company. When the subdivided property or land was finally sold, the taxpayer disagreed that the earnings were not usual income. The court detained that the profits or gains obtained by selling the land or the property were not able to be gauged (Oppermann, 2009).
IV) Statham & Anor v FC of T 89 ATC 4070
It has been decided that the commissioner had adjusted the income of the estate. It was corrected in a wrong way that the tax was assessed. This case is related to the income tax.
V) Casimaty v FC of T 97 ATC 5135
Fabulous conflict rose due to the fact if the profit that is drawn is liable for taxes. The fact that the person was going to bring profit by selling a particular piece of land, and it was related to the demonstration of the circumstances where there is the lack of profit making intention in the case of profit-making plans. The farmer was attempting to bay a stretch of land. But there was a dispute regarding this land (Ruff, 2014).
VI) Moana Sand Pty Ltd v FC of T 88 ATC 4897
The company was holding the land for a longer duration of time and was not making use of it. The land could only be sold to someone who wishes to use it for commercial purpose or someone who is a relative of the owner of the company. This was an attempt to increase the return. The company was holding the land and was not willing to sell it to another taxpayer until the prices hiked. When the property was sold, later on, the conflict rose regarding the tax that was to be paid. In this case, the sand company was holding the land after the dust from the ground was extracted (Schroeder, Clark and Cathey, 2011).
VII) Crow v FC of T 88 ATC 4620
The end of the deal was found that the land was offered to the farmer. The case mentioned above is related to a producer being considered as a taxpayer. The farmer was attempting to bay a stretch of land. But there was a dispute regarding this land (Lakshmanan, 2015).
VIII) McCurry & Anor v FC of T 98 ATC 4487
Lastly, the verdict came, and it was for the brothers that said the fact that the brothers need not pay any tax. In the attempt to renovate the land the houses had to be removed. The above case deals with the fact that the land was owned by the two brothers (Ruppel, 2015). But the conflict rose due to the fact if the brothers had to pay the taxes regarding the property. This was an attempt to increase the return (Tracy, 2013). The company was holding the land and was not willing to sell it to another taxpayer until the prices hiked.
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