Question 2 (16 Marks)

Ms Tracy Tan an Australian who after ten years working for the Department of Trade in Melbourne took a job in Vanuatu three years ago on 1^st July 2017, as Trade liaison officer with the Australian High Commission in Vanuatu. She has retuned on 30^th June, 2020. Before leaving Tracy lived with her mother in a house owned by her mother. Tracy has returned to that house to live.

Tracy tells you the following:

• She has a group certificate from the Department of Trade of the Commonwealth of Australia (DT)for the year 2019/2020 showing that she earned $70,000 on which her employer, the DT deducted $14,670.
• She worked part time at a weekend coaching school in Vanuatu coaching children in English. She was paid $2,500 for this work. Vanuatu does not have taxation of individuals.
• She also received a transfer allowance from the DT to move back to Australia that amounted to $2564. Her airfare and the cost of taxis and freight on her personal effects came to $2,664.
• She earned $3500 in fully franked dividends from Australian Listed Public Companies.
• She earned $500 in an unfranked dividend from one Australian Listed Public Company.
• When she returned to Australia, she sold a sports car she had put on blocks when she left. The car had cost her $5000 in 2010, and when she sold it, she received $6,500 for it.
• On 20^th June, 2020, she sold for $10,000 a block of shares that she had purchased in 2014 for $12,000.

Tracy asks you to advise her on her tax situation for the 2019/2020 tax year.

Required:

(a) Draw up a table showing the tax effect of these transaction, and calculating Tracys tax liability or refund based on her being a resident. (7 x 1 = 7 Marks)

(b) Draw up a table showing the tax effect of these transactions and calculating Tracys tax liability or refund based on her being a non resident. (7 x 1 = 7 Marks)

(c) Advise Tracy as to which situation (resident or non resident) would apply to her. Give reasons. (2 Marks)