Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Karen is single, residing in London, England. During the current tax year, Karen travelled to New Zealand to undertake engineering work for an Australian company,

image text in transcribed
Karen is single, residing in London, England. During the current tax year, Karen travelled to New Zealand to undertake engineering work for an Australian company, Karen was paid A$12,000 for this period of work. The majority of the income was paid into an Australian bank account; however, Karen directed the Australian company to pay $4.000 into her partners bank account. No interest was earned on the Australian bank account. Karen also earned A$75,000 from her normal employment in England with a London engineering firm. This income was paid into her normal London bank account and A$1,000 in interest income was derived during the 2021 income tax year from that account. Karen also had an investment property in Sydney, NSW. Her net rental income was AS44,000 for the income year ending 30 June 2021. REQUIRED Advise Karen of the Australian tax consequences arising from the above fact situation for the year ending 30 June 2021 by answering the following four questions: 1 Explain whether the engineering work is Australian sourced income and whether the place of payment is important in this Instance (2 marks), 2 Explain, based on Australian tax law principles, the consequences of Karen directing $4,000 of income to be paid directly to her partner (1 marks). 3 Explain whether the interest and rental receipts are Australian sourced income (2 marks). 4 Determine Karen's Australian net tax liability. If none, justify (2 mark). Focus only on the Australian tax consequences and disregard double tax agreements. You are required to include references to appropriate legislation, case law and tax rulings. Disregard GST and show all workings where required. Karen is single, residing in London, England. During the current tax year, Karen travelled to New Zealand to undertake engineering work for an Australian company, Karen was paid A$12,000 for this period of work. The majority of the income was paid into an Australian bank account; however, Karen directed the Australian company to pay $4.000 into her partners bank account. No interest was earned on the Australian bank account. Karen also earned A$75,000 from her normal employment in England with a London engineering firm. This income was paid into her normal London bank account and A$1,000 in interest income was derived during the 2021 income tax year from that account. Karen also had an investment property in Sydney, NSW. Her net rental income was AS44,000 for the income year ending 30 June 2021. REQUIRED Advise Karen of the Australian tax consequences arising from the above fact situation for the year ending 30 June 2021 by answering the following four questions: 1 Explain whether the engineering work is Australian sourced income and whether the place of payment is important in this Instance (2 marks), 2 Explain, based on Australian tax law principles, the consequences of Karen directing $4,000 of income to be paid directly to her partner (1 marks). 3 Explain whether the interest and rental receipts are Australian sourced income (2 marks). 4 Determine Karen's Australian net tax liability. If none, justify (2 mark). Focus only on the Australian tax consequences and disregard double tax agreements. You are required to include references to appropriate legislation, case law and tax rulings. Disregard GST and show all workings where required

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Finance: Theory And Practice

Authors: Eddie McLaney

6th Edition

9780273673569

More Books

Students also viewed these Accounting questions

Question

Explain how you would reduce stress at work.

Answered: 1 week ago