Lucia Jackson is a 21 year old aspiring performing artist. Lucia graduated from a Bachelor of Musical Theatre at Griffith University (as a Commonwealth Supported Student) in September 2020.

Some of Lucia’s personal information includes;

- Lucia and her partner have lived together since December 2020 at 2/65 Pembroke Road Coorparoo. Ethan and Lucia purchased the property in June 2020 and own it equally.

- Lucia has a transaction account with AMP where her income is transferred from her employers and customers.

- Lucia owns shares in Calvin Klein Ltd

- Lucia receives royalty income from a book that she wrote “Brisbane to Bolshoi a little girls dream’. The book is published in Australia.

- Lucia’s parents and brother all live in Brisbane.

- Lucia was born in Brisbane at Sunnybank Private Hospital.

Hamilton the Musical (on Broadway), offers Lucia a role in there ensemble from 1 July 2021 to 30 June 2024. Lucia accepts the job offer, and moves to the United States of America. She leaves Australia on 18 May 2021 with her partner Ethan and upon arrival they rent and move into a one room studio apartment. They sign a three year lease on the property. Lucia starts rehearsal for the musical immediately and she also attends dance technique classes in her spare time to ensure that she is maintaining her dance skills. Ethan finds work as a physiotherapist in a local sporting club. Lucia and Ethan open a joint bank account in America and their salaries are deposited directly into that account.

Before leaving Australia, Lucia cancels her gym membership. Once she settles overseas she advises AMP, her book publisher and Calvin Klein Ltd of her new address. Ethan and Lucia decide to rent their Coorparoo property to tenants as a full furnished apartment. Lucia returns to Australia twice during the 2021/2022 tax year. The first trip was to attend her brother’s wedding for 1 week during November 2021 and the second trip was to film a short film where she is the supporting actress. The filming is completed in 5 days.

Lucia has the following income receipts:

(i) $4,000 for her role in the short film produced in Australia. Filming took place from 1 to 5 March 2022 in North Queensland. Lucia received payment on 1 April 2022 directly into her AMP bank account.

(ii) A weekly rental payment of $450 in respect of the apartment that she owns with Ethan. During the period of 1 July 2021 to 30 June 2022, the total amount received in rent for Lucia and Ethan was $23,400. The rent was paid into Lucia and Ethan’s joint bank account in America.

(iii) $30 interest paid by the Bank of America into Lucia and Ethan’s joint bank account.

(iv) $4805 received as a royalty payment for the book she wrote ‘Brisbane to Bolshoi – a little girls dream’. 3100 books were sold by her Australian publisher during the period from 1 July 2021 to 30 June 2022. Lucia received the payment into her AMP bank account on 21 July 2022.

(v) An unfranked dividend of $950 from Calvin Klein Ltd. The dividend payment was deposited into Lucia’s Bank of America account on 15 April 2022.

(vi) Salary and allowances $78,000 (converted to AUS dollar value) received from Hamilton on Broadway for her role in the musical being staged in the United States. Payments were received into her Bank of America account.

Question

Completed in ILAC format. using issue, law and application, and conclusion.

a. Determine whether Lucia would be considered an Australian or a Foreign resident for tax purposes in the 2021-2022 tax year. Ensure that you consider all of the residency tests.

b. Please consider the source of Lucia’s receipts as listed as items (i) to (vi) above.

c. Please consider the derivation of the receipts that are relevant to Lucia’s residency status Ensure that you justify your application with the relevant law. In-text referencing of the law is all that is necessary. For case law, the names of the parties is sufficient. For legislation, the section, subsection (and if relevant the item number) is sufficient.