Trevor is 22 years old and was born in England. He had thefollowing transactions:
(1) On 1 April 2015 he moved to Australia to take up a 2 yearappointment with an Australian bank after working for the Englishsubsidiary of the bank for 3 years in London. He lives rentfree ina house owned by the bank. He has a bank account in England,however he openedup a bank account in Australia so that his salarycan be deposited into the account. Being akeen footballer, hejoined a local football club and plays in local competitions once aweek.His salary from the bank totalled $130,000 for the year. Healso earned $300 in interest fromhis English bank account. (5mark)
(2) On 1 May 2015, Trevor bought a large sculpture at a weekendmarket for $450 and spent$150 to transport it to his house. He putthe sculpture in his garden since then until he sold itfor $2,000in August 2015. [3 marks]
(3) He has several lemon trees in his Australian garden. Due toan abundance of lemons, Trevorallowed his friends to enter theproperty and pick as many lemons from the trees as theywanted. Hisfriends pay Trevor $0.20 per lemon picked from the trees. [4marks]
(4) Once a week his football team acknowledges its most valuableplayer of the game. Over theseason Trevor has been most valuableplayer on seven occasions. As a sponsor of the footballteam,Trevorâs employer has donated the prizes to give to the mostvaluable player. To dateTrevor has received several bottles of wineand a large serving plate with his name, team andthe year paintedon the back. [3 marks]
(5) On 1 August 2012, before he came to Australia, Trevorpurchased 10 hectares of land for $1min Sydney that was suitablefor subdivision. At the time of the purchase, he intended togetapproval from the council to subdivide the land onto 50 blocksand then sell them for a profit.In the meantime Trevor leased theproperty for grazing horses. On 30 May 2015, the councilrejectedhis application to subdivide the land. Trevor sold the land for $3mwithout anysubdivision on 30 June 2015 with the purchase money tobe paid on 1 January 2016. [5marks]
Explain the income tax implications of the above transactions.You must cite relevant sections,case law and tax rulings in supportof your answer.
Trevor is 22 years old and was born in England. He had thefollowing transactions:
(1) On 1 April 2015 he moved to Australia to take up a 2 yearappointment with an Australian bank after working for the Englishsubsidiary of the bank for 3 years in London. He lives rentfree ina house owned by the bank. He has a bank account in England,however he openedup a bank account in Australia so that his salarycan be deposited into the account. Being akeen footballer, hejoined a local football club and plays in local competitions once aweek.His salary from the bank totalled $130,000 for the year. Healso earned $300 in interest fromhis English bank account. (5mark)
(2) On 1 May 2015, Trevor bought a large sculpture at a weekendmarket for $450 and spent$150 to transport it to his house. He putthe sculpture in his garden since then until he sold itfor $2,000in August 2015. [3 marks]
(3) He has several lemon trees in his Australian garden. Due toan abundance of lemons, Trevorallowed his friends to enter theproperty and pick as many lemons from the trees as theywanted. Hisfriends pay Trevor $0.20 per lemon picked from the trees. [4marks]
(4) Once a week his football team acknowledges its most valuableplayer of the game. Over theseason Trevor has been most valuableplayer on seven occasions. As a sponsor of the footballteam,Trevorâs employer has donated the prizes to give to the mostvaluable player. To dateTrevor has received several bottles of wineand a large serving plate with his name, team andthe year paintedon the back. [3 marks]
(5) On 1 August 2012, before he came to Australia, Trevorpurchased 10 hectares of land for $1min Sydney that was suitablefor subdivision. At the time of the purchase, he intended togetapproval from the council to subdivide the land onto 50 blocksand then sell them for a profit.In the meantime Trevor leased theproperty for grazing horses. On 30 May 2015, the councilrejectedhis application to subdivide the land. Trevor sold the land for $3mwithout anysubdivision on 30 June 2015 with the purchase money tobe paid on 1 January 2016. [5marks]
Explain the income tax implications of the above transactions.You must cite relevant sections,case law and tax rulings in supportof your answer.
