You are a Graduate Tax Advisor, employed by Tax Advisors Pty Ltd. Your Partner has assigned you the following client file after attending a meeting with the client. Client Background Judy Somerville is employed by Ansett Airways Limited (Ansett) since 2003 as a long-haul flight attendant based in Melbourne, Australia. The nature of Judys position with Ansett sees her flying to international ports where she spends 183 days away from her home base each calendar year. The remaining days of each calendar year are spent in Australia, and Judy uses this nonflying time to organise the importation of textiles into Australia from Textiles Inc. (a company registered in the USA). Until recently, Judy was the exclusive distributor of textiles to retailers in Australia.

Candidates must apply the IRAC principle when addressing the relevant issues (i.e. I= Identify the key issues, R= Cite the relevant legislative provisions and case law (rules) where appropriate, A = apply the relevant rules to the facts presenting arguments for and against and C = form a conclusion based on your stronger argument).

Your Partner has requested that you review the file in its entirety (as below) in order to undertake the engagement work as agreed between Tax Advisors Pty Ltd and Judy Somerville

Using Australian Tax Laws

Judy Somerville has engaged Tax Advisors Pty Ltd to advise her of all her tax issues which will arise from the documents provided in respect of the income year ending 30 June 2020. Your Partner has requested that you: Prepare a letter of advice to Judy Somerville which identifies all relevant tax issues that will arise out of all the documents provided, critically analyzing and applying the taxation treatment to the issues, i.e., you will need to argue and support your view and consider differing views (if applicable), and finally, indicate your recommended action based on your better view, i.e., your conclusion. Be sure to consider all issues, including but not limited to issues that may not be as obvious, for example tax accounting, tax periods, potential levies, surcharges, offsets and substantiation requirements. You must ensure that your analysis used to determine your recommended action is fully supported with relevant authority, for example, tax legislation and case law

WESTFIELDS LTD ABN 96 123 456 789 Dividend Statement Ms Judy Somerville 10 Diamond Ave Waverley VIC 3150 Notification of Final Dividend Record Date: 1 March 2020 | Payment Date: 30 June 2020 Security Number Unfranked Amount Franked Amount Franking Credits Ordinary Shares 201 0.00 700.00 300.00 Your dividend payment has been remitted to the following account on the payment date: Bank: BSB Number: Account Number: Account Name: Victorian State Bank 011-111 123456790 Judy Somerville Please note that your tax file number has been received and recorded. Please retain this Dividend Statement for taxation purposes ** End of Dividend Statement ** WESTFIELDS LTD ABN 96 123 456 789 Dividend Statement Ms Judy Somerville 10 Diamond Ave Waverley VIC 3150 Notification of Final Dividend Record Date: 1 March 2020 | Payment Date: 30 June 2020 Security Number Unfranked Amount Franked Amount Franking Credits Ordinary Shares 201 0.00 700.00 300.00 Your dividend payment has been remitted to the following account on the payment date: Bank: BSB Number: Account Number: Account Name: Victorian State Bank 011-111 123456790 Judy Somerville Please note that your tax file number has been received and recorded. Please retain this Dividend Statement for taxation purposes ** End of Dividend Statement **