Required:Complete both assignment tasks 1 and 2. Limit your response to task 1 to under 1,200 words. In grading task one examiners will focus on your referencing to case law, appropriate sections of the ITAA 1936 and ITAA 1997 and income tax rulings issued by the Australian Taxation Office. Section referencing is not required in respect of task 2. A list of references used to answer all assignment tasks should be attached to the assignment.

Assignment Task One

Dr Scott Piner

1 Leberstrart

Brussels, Belgium

10 April, 2019

Ms Paula Uptrum

Uptrum Business Services

PO Box 2

Newcastle NSW Australia 2308

Dear Paula,

As you see from the above address I have safety made my transition to Belgium. Firstly, let me thank you for your personal assistance in what, for me, has been a most difficult time. The divorce from my wife was finalised last month and our property settled. Having no children, we can be thankful the separation was not complicated.

The divorce has marked a turning point in my life and (call it a mid-life crisis) I am determined to follow my dream of being an author of historical war novels. I have just started writing my first book based on the World War 1 battlefields of Belgium and living here with access to the actual battlefields is essential to my research. Of course there can be no certainty of the ultimate success of my book writing venture, but I believe one must follow their dreams. However, there have been promising developments with two publishers showing interest in my concept, with one paying an option to read my first drafts.

I was becoming fatigued practising medicine at the John Hunter Hospital and I am now feeling invigorated by the break. If my writing venture comes to nothing I will probably have to return to Australia as Belgian regulations prevent me from practising medicine here. The John Hunter Hospital has promised to keep my job open for two years so there is always that to fall back on. In saying that though, I am confident I can be a successful author and my long-term goal is a series of European war stories which I can research from my base here. I have recently signed a 12 month lease on an apartment in Belgium that has a good study area. I have also purchased a cheap car although it doesnt compare with my Porsche which is at home with mother. She has been wonderful in looking after my Australian affairs, paying my bills etc.

I assume my tax for the year ended 30 June 2019 will be a little out of the ordinary. I would appreciate your early advice on certain matters to enable me to collect the necessary information to prepare my 2019 income tax return when it becomes due. In particular could you respond to the following issues?

1. I departed Australia on the 22^nd January 2019 for Belgium. How will this affect my residency for tax purposes and what are the implications for the 2019 year?

• My Australian income for the 2019 year will comprise:

- Australian Salary from the hospital 1/7/18 to 31/12/19

- Interest from a $60,000 Australian term deposit (still active)

- Net rent from my Melbourne rental property (full year)

I cancelled my Australian medical fund insurance cover on 31 December 2019 as it does not provide cover while I am residing overseas. If I return to Australia I am prepared to pay the extra premium charged for re-joining the fund.

• My income from Belgium sources for the 2019 tax year will be:

• Interest from a $60,000 term deposit with a Brussels bank
• $1000 (AUD equivalent) received from an English publisher as a nonrefundable payment entitling them to first option to publish my book.

- Approximately $10,000 (AUD equivalent) gross salary from part time employment as a bartender in a Brussels bar.

2. Will the receipt from the British publisher be assessable income? While I intend writing to be my business I am not sure if the outcome will be profitable. Are there any guidelines to establish whether this is a business or a hobby and what is your opinion of its status?

My expenses so far regarding the book are as follows:

- Airfares & removal expenses to Belgium $5000

- Hire of computer for 12 months $1200

- Sundry purchases $290

I would appreciate your advice on the above matters and again express my thanks for your ongoing assistance with my financial affairs.

Regards

Dr Scott Piner

18 marks