Seminar 3.docx - 3106AFE Revenue Law Trimester 2 2017...

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3106AFE Revenue Law Trimester 2, 2017 Seminar 3 Carl Worth was born in Australia. Since 1999, Carl has worked in Brisbane for a building construction firm called Leeton Holdings Ltd. On 15 June 2016, he moved to Amsterdam to take up a senior management role with Leeton Holdings International Ltd. He signed his new contract of employment in Brisbane, agreeing to stay in Amsterdam for three years, with an option for a further three years. Carl’s intention is to remain in Amsterdam for at least the three years, and then make a decision on the second three-year option. Nonetheless Carl intends to return to Australia after his work commitments cease. His wife, Mary remained in Australia until 1 August 2016 (to complete her employment contract as a teacher) at which point, she joined her husband in Amsterdam. Prior to her departure from Australia, Mary closed their bank accounts with the Commonwealth Bank, sold their cars, and cancelled all of their Australian insurance policies. Carl and Mary made the decision to sell their family home before Mary left for Amsterdam because it was too large, given all three of their children were grown up and independent. The only Australian asset that Carl retained was some Australian mining shares. He notified the mining company of his change of address before moving to Amsterdam. In moving to Amsterdam, Carl took his personal items, leased an apartment (signing a three year lease), opened a new bank account with Bank of Amsterdam, and joined a local tennis club. Carl and Mary returned to Australia on 20 December 2016 to reunite with their family for the Christmas holidays (and returned to Amsterdam on 15 January 2017). During the income year ended 30 June 2017, Carl received the following payments: (i) GROSS SALARY of EUR250,000 ( AUD$355,000 ) with the net amount paid by Leeton Holdings International Ltd into his Bank of Amsterdam account (ii) BONUS of AUD$15,000 – this bonus was paid by the Brisbane based Leeton Holdings Ltd and relates to a 6 monthly performance based bonus incentive scheme for the period ended 30 June 2016. Leeton Holdings Ltd transferred the bonus payment to his Bank of Amsterdam account (the payment was credited to this account on 15 September 2016).
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3106AFE Revenue Law Trimester 2, 2017 (iii) EUR703 ( AUD$1,000 ) INTEREST paid by the Bank of Amsterdam into his savings account during the year ended 30 June 2017. (iv) AUD$500 unfranked DIVIDEND from AMC Ltd, an Australian mining company which was deposited into his Bank of Amsterdam account on 22 October 2016. REQUIRED: Advise Carl whether the above receipts will be subject to income tax in Australia. Throughout your answer, please ensure you refer to the relevant law as applicable. [Ignore the effect of any double tax agreements]. Sub issue (1): Are any of the receipts (salary, bonus, interest or dividend) a type of assessable income?
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