Peter Dunn is a surgeon with particular expertise in complex brain surgery. He is employed as a part-time lecturer at Canberra University (the University), earning $65,000 per year. In addition, he is also employed at the Goulburn Hospital (the Hospital), earning $275.000 per year. He is provided with an office at both the University and the Hospital.

Peter has worked in many countries around the world arriving in Australia in July 2023 after spending 5 years in New Zealand. The University and the Hospital were keen to employ him as there is a lack of doctors with his expertise in Australia. Peter's spouse and children have remained in the family home in Auckland, and he returns every second weekend to visit them as his work commitments allow. Peter was born in New Zealand and has many friends there, and volunteers with a charity assisting homeless people in Auckland. He enjoys kayaking and engaging in other water sports around Auckland Harbour.

Every Thursday Peter travels from his home to the Hospital in the morning to work there until 2pm. Peter then travels from the Hospital to the University where he teaches until 8pm, and then returns to his home. He incurs $1,000 in train fares for this travel during the income

year.

On 1 June of the current income year, Peter purchases an IPad at a cost of $3,000 for work purposes but Peter also uses it to watch the football on Saturday afternoons. Peter thinks the IPad use for watching the football is 10%, the rest of the time he uses the laptop to prepare lectures for his students. The effective life of the IPad is three years.

Peter starts an on-line medical equipment business on the weekends in partnership with his friend Bill. Peter and Bill share profits/losses equally. They use Bill's garage at his home near Canberra University as a place to store the equipment and operate the business. The partnership made a profit in the current income year. Peter's share of the partnership profit for the income year was $25,000.

Required:

Using relevant legislation and case law, please answer the following questions:

1. What are the four tests of residence applying to individuals? Explain each test and advise whether or not Peter is a resident of Australia under that test.
2. What is the source of Peter's employment income?
3. Explain whether the following amounts are allowable deductions:

• The purchase costs for the IPad;
• The train fares for the travel Peter does every Thursday.

4. Advise Peter about the income tax consequences of the partnership making a proft in the current income year.