Posted: January 25th, 2017

Discuss with reference to legislation, case law and/or rulings whether Julie would be considered a resident of Australia for tax purposes for the income year ended 30 June 2016.

Julie is 22 years old and was born in Vancouver, Canada.  On 2 September 2015, she arrived in Brisbane on a 12-month working holiday visa.  Prior to arriving in Brisbane Julie had always lived with her parents in Canada. Julie had worked in Vancouver prior to leaving for Australia and had been saving for her travel.  She did not own any significant assets in Canada, only personal possessions such as clothes and a few electronic items.  She left most of this with her parents while she was in Australia. Julie stayed in a hostel in Brisbane for 2 weeks after arriving, visiting the Gold Coast and Sunshine Coast and other tourist attractions.  She then travelled to Bundaberg in Queensland to work as a fruit picker on a farm for three months.  She lived with other backpackers in a hostel. With her savings she then travelled around North Queensland, the Northern Territory and Western Australia for three months staying in hostels. When her savings started to run out Julie found work in a Perth coffee shop.  Julie shared rented accommodation with friends she had met while backpacking.  She was in Perth for three months. On 16 June 2016 Julie decided to return to Vancouver and moved back into her parents’ house.  She wanted apply for a working holiday in the United Kingdom so started working and saving for her next adventure.  After six months she started travelling again. Required: Discuss with reference to legislation, case law and/or rulings whether Julie would be considered a resident of Australia for tax purposes for the income year ended 30 June 2016.  You do not need to consider the temporary residency rules. LAW5230 Assignment Semester 3, 2016    Page | 2    During the year-ended 30 June 2016 Julie had the following transactions:  Salary from employment in Canada prior to 31 August 2015 equivalent to AUD$5,500.  Salary paid by a fruit grower in Bundaberg AUD$6,000.  A $250 prize for winning the annual watermelon eating contest in Bundaberg.  Interest on her Australian bank account of $180.  Interest on her Canadian bank account equivalent to AUD$200, from which $20 withholding tax had been deducted by the Canadian bank prior to crediting her account on 1 March 2016.  $220 from the sale of excess clothing, sleeping bag and other personal items on ebay prior to Julie leaving Australia. Required: Based on your conclusion on Julie’s residency, and discussing the source and derivation of income principles, state which amounts would be included in her assessable income for the year.  You do not need to consider the consequences of any Double Tax Agreements.