THE UNIVERSITY OF MELBOURNE

BLAW 30002 Taxation Law I
TAKE-HOME EXAMINATION

Semester 2, 2020

To be downloaded: Wednesday 11 November via LMS from 10:00am (AEDT)
To be submitted: Wednesday 11 November via LMS before 12:00pm (AEDT)

INSTRUCTIONS FOR CANDIDATES
Please read ALL of these instructions carefully, they may vary between subjects.

1. Mark value: This examination is worth 50% of your total assessment for this subject.
2. Questions: There are 3 questions in this exam. You must answer all questions. Question
1 is worth 20 marks. Question 2 is worth 13 marks. Question 3 is worth 17 marks.
3. Word limit: The word limit for this exam is 3000 words. The word limit will be strictly
enforced, and any excess will incur a mark penalty as set out in section 4.2.2 of the
Course Outline.
4. Referencing: Footnotes and a bibliography are not required for this exam.
5. Cover sheet: A coversheet is not required. Put these details on the first page of your
submission (and in the header or footer):
a. Your student ID number (not your name)
b. Subject code and subject name
c. Your word count for your exam answer
6. Plagiarism & Originality: Answers must be the sole, original work of each student.
Consequently, students are strictly prohibited from consulting each other or any other
person in relation to this exam. All pieces of assessment will be put through an
electronic plagiarism check and will be retained for future plagiarism checking. This
exercise is subject to all the rules governing assessment in the Melbourne Law School
and the university. It is your responsibility to be aware of all those rules, including the
rules on academic misconduct. See www.academichonesty.unimelb.edu.au for more
information.
7. Late Submission: Late submissions are not accepted; please ensure you begin submitting
your assessment at least 10 minutes before the end of the examination.
8. Queries: If you have any queries regarding the exam, please contact the Academic
Support Office at law-assessment@unimelb.edu.au within one hour of its first release
and state what the query is and why you think it needs to be resolved. Questions that
warrant an answer will be published with an answer on the LMS. Students are not
permitted to make direct contact with the lecturer about the examination paper.
Please note that any clarification or corrections will be sent as a Canvas announcement.
Ensure LMS Canvas notifications are enabled and you check your student email account.
9. Submission: All papers must be submitted electronically via LMS Canvas under
Assignments, please ensure you submit under the correct subject and assignment. If you
encounter problems submitting via LMS you MUST follow the instructions regarding
accessing Canvas Support on the Canvas assignment link.

Question 1 (20 marks)

Harry is employed as a photographer with a Melbourne-based magazine company. His
remuneration package with the company is as follows:

• Salary of $100,000 per year.

• One return airline ticket to London, United Kingdom each year ($5,000 this year, no GST is
charged on international airfares). The airfare is provided so that Harry can attend a
prestigious annual photography exhibition in London. The exhibition showcases all the latest
photography techniques, and it is important for Harry to attend so that he can keep up-to-
date and improve his photography skills. He believes that doing so will improve his chances
of earning more income as a photographer as he will be able to take sought-after photos.
Harry also likes going to London because his family lives in Windsor which is close to
London.

• Payment of Harry’s HECS fees for a university course ($2,000 this year).

Before moving to Melbourne, Harry was a famous photographer in London. His work is in-
demand all over the world. Harry has recently received a payment of $50,000 from one London
magazine for agreeing to join that magazine if he ever moved back to England, and not work for
any other magazine in England. Harry has no plans to return to England at this time.

Required:

(a) Advise Harry’s employer as to its fringe benefits tax consequences (including calculation of
the FBT liability, if any) for the year ending 31 March 2021 in relation to Harry’s
remuneration package. You may assume that the relevant legislation is the same as of 31
October 2020. You may also assume that Harry’s employer is registered for GST and that the
employer has not provided benefits to other employees. (13 marks)

(b) Advise Harry as to his assessable income consequences arising out of the above
information. You may assume that Harry is an Australian tax resident at all times. (7 marks)


THIS IS THE END OF QUESTION 1. QUESTIONS 2 AND 3 ARE ON THE NEXT PAGE.


THIS IS THE END OF THE EXAMINATION


Question 2 (13 marks)

Meghan has provided you with the following information:

(a) She received a dividend of $140 which was franked to 50%. You may assume that the
company’s corporate tax rate for imputation purposes is 30%.

(b) She received rental income of $20,000 in relation to an investment property she owns. Half
the rent is paid directly to Meghan’s mother-in law as she lent Meghan the money to buy
the property.

(c) She incurred expenses of $2,000 in relation to her investment property. The expenses
related to repainting the outside of the property which had deteriorated with sun damage.
Meghan used the latest sun protection paint to repaint the walls.

(d) She incurred expenses of $5,000 paying her sister-in-law, Kate, to help her for one day to
paint the walls of her investment property.

Required:
Advise Meghan as to her income tax consequences arising in relation to the above information.
You may assume that Meghan is an Australian tax resident at all times.

Question 3 (17 marks)

Archie is an Australian citizen. Until November 2019, he worked as a manager in the Melbourne
office of an international consulting firm. At this time, he was advised that he would be
promoted to the position of director at the firm, but the promotion would require him to move
to Thailand. Archie and his family were excited about the move and he happily accepted the
promotion and the move to Thailand. Until that time, Archie and his family had always lived in
Australia and had only been overseas for short holidays of no more than 2 weeks each.

Archie and his family moved to Thailand on 27 December 2019, after spending Christmas with
the family in Australia. He started work in Thailand in the first week of January. Archie and his
family have settled well into life in Thailand and have made many friends through the expat
community and the children’s school. They have not returned to Australia since arriving in
Thailand. They are happy in Thailand as they live in a large house with a large garden and a pool.
The house was organised by Archie’s employer and they have lived in the house since arriving in
Thailand.

Archie is renting out his house in Hawthorn, Victoria while they are overseas. At this stage, they
plan to return to Australia in about 5 years when the children will be towards the end of their
high school education. Archie has maintained his Australian bank accounts, share portfolio and
superannuation fund while overseas. He has also opened a bank account in Thailand and trades
shares on the Australian and Thai share markets.

Required:
Advise Archie as to whether he would be considered a resident of Australia for income tax
purposes for the year ended 30 June 2020. You may assume that Archie does not satisfy the
183-day test and that he is not a member of a relevant superannuation fund.