Question
On 10 July 2014, Jim Morris was transferred to the Tokyo office of his company, Worldwide Australia Ltd, for five years. His wife Mandy accompanied
On 10 July 2014, Jim Morris was transferred to the Tokyo office of his company, Worldwide Australia Ltd, for five years. His wife Mandy accompanied him to Tokyo. In Tokyo they lived in an apartment owned by the company and leased their Melbourne residence. While residing in Tokyo Mandy borrowed $100,000 from Westpac Bank on 1 December 2014, to fund the purchase of $50,000 shares in Worldwide Australia.
During the 2014/2015 tax year Mandy received $10,000 as her share of rental income from the lease of their Australian home, and $2500 in fully franked (taxed) distributions from Worldwide Australia. She incurred no expense in deriving the rental income, but her interest payments on the Westpac bank loan amounted to $5,550.
What are the Australian tax consequences of these transactions for Mandy Morris? Explain and justify your answer relevant case laws. Detail discussion is require
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started