CLWM4100 —Tax Law
Yvonne Merrick, the holder of a British passport and a relevant working visa, arrived in Australia from the UK in January 2015 and started work as an administrator in a Brisbane hospital. On 10 July 2017 she travelled back to the UK for personal reasons and worked in odd jobs until 1 April 2018 when she returned to Brisbane and resumed her position at the hospital. While in the UK she continued to maintain the apartment she had bought in Brisbane and her Australian bank account. She was on ’leave without pay- from her job at the hospital.
During the 2017/18 year Yvonne was paid AUDS25.000 (gross) for her work in the UK and $15,000 for her work as an administrator in Australia. UK tax of AUDS4.500 was deducted from her salary. She was paid a bonus of $12,000 on 15 February 2018 for her work done during 2017. She also received $2,000 interest on the savings in her Australian bank account and a fully franked dividend of S700 from her share investments in the Australian company HAL Corporation Ltd.
On 1 July 2018 Yvonne left Australia indefinitely to take up a full-time position as a senior administrator in a UK hospital. In the 2018/19 income year, she was paid a salary of $70,000 for her work in the UK hospital. Tax amounting to $7,000 was deducted from her UK salary. For the 2018/19 year Yvonne received interest of $2,400 on her Australian bank account and a fully franked dividend of $900 on her shares from HAL Corporation Ltd.
Upon leaving Australia. Yvonne sold all of her furniture and leased the apartment she owns for $600 per week. For the 2018/19 year she received $26,000 rental income.
Part 1) Calculate her Australian assessable income for the 2017/18 and 2018/19 tax years. You must give reasons for the inclusion or exclusion of all receipts in her assessable income. Refer to relevant legislation and case(s) to determine her residency.
| Part 2) Advise Yvonne regarding foreign tax paid in the UK for the 2017/18 tax year only. Calculate the tax offset amount.