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Hans is a German born national who has lived in Australia for the last 10 years During that time Hans has derived his income as a musician In November 2016, Hans signed a contract to perform two...

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Hans is a German born national who has lived in Australia for the last 10 years During that time Hans has derived his income as a musician In November 2016, Hans signed a contract to perform two concerts in Berlin in January 2017 He returned to Germany to perform the concerts, intending to come back to Australia immediately thereafter

Hans was received more warmly by the concert audiences in Germany than he had ever been in Australia, and he decided in January 2017 to stay there for a year to see if he could make a successful musical career In May 2017, Hans signed a 5-year contract with a Berlin agent The contract required him to be available for tours throughout Europe A consequence of these developments was that Hans decided to abandon his wife and two children who remained in Adelaide

Hans received $A25,000 for his concerts in Berlin in January 2017 — one half before he left Australia and the remainder immediately after the concerts He was also paid a $50,000 lump sum in May 2017 when he signed the 5-year contract Following the signing of this 5-year contract, Hans decided to set up house permanently in Germany

Explain whether these amounts are assessable, citing cases and relevant provisions of the tax legislation to substantiate your argument

Would your answer differ if Hans had not set up home in Germany, but moved regularly from one country to another?

=> Domicile test FCT v Applegate 1979 FACt V JENKINS 1982

Answered 94 days After May 15, 2022

Solution

Prince answered on Aug 18 2022
81 Votes
Solution of Part a
To categorise these sums as assessable or not, it is important to ascertain if Hans resides in Australia. To be deemed a resident of Australia, a person must meet one of the following requirements:
1. Resident in the traditional sense
He does have Australian family links, but it was said that he had to "abandon" them, suggesting that he might not be returning there frequently. His physicality is also likely to be restricted if he has to be accessible for tours across Europe during the year. His source of income comes through a Berlin agency, indicating that he is being paid by an individual outside of Australia. Despite the fact that he receives payment in Australian dollars, it doesn't seem to matter much in this situation. Mynott v. FC of T Left Australia in 1997 to work a
oad; he was regarded as a non-resident during that time since he spent 468 days a
oad and had no commercial or job ties to Australia during that time.
2. Test of domicile
His...
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