ACFI3004 Australian Tax Residency & Income Assessment: Heny & Joceline Case Analysis, Singapore

Assignment Task One (1200 words – 10 marks)

Heny Widuri is an Indonesian, married to her husband for 10 years, with two kids. Heny is a Senior Auditor in a top tier audit firm operating in Indonesia. The firm has its head office in Sydney, Australia. With her husband, the couple own properties in Indonesia comprising of their own home, a rental property, shares in local companies (dividends are often paid twice a year) and cash deposits in high interest-bearing bank accounts. On 8 August 2023, Heny was transferred to the head office on a temporary three-month secondment (ending on 7 November 2023). The purpose of the secondment was to provide Heny with knowledge and experience regarding the firm’s global operations, preparing her to lead an expanding project in Indonesia in late 2024. During the secondment period, Heny remained an employee of the Indonesian office, and her salary was paid into her Indonesian bank account. The company also paid for her accommodation and travel allowances. Heny’s husband and kids stayed in Indonesia but visited her two times.

While Heny was happy with the lifestyle and living environment in Sydney, she is not happy with her work at the head office. Heny’s intention was to return to Indonesia at the conclusion of her secondment, but she sought and was offered a permanent position in another audit firm, starting from January 2024. On 15 January 2024, Heny started her job and lived in a rental property (with the lease term of two years). In late February 2024, her husband and kids moved to her rental apartment and started their new life together. The family rent out their house, together with their rental property in Indonesia. While they brought some cash and deposited it in an interest-bearing account in a bank in Sydney, the couple keep some cash in their interest-bearing bank accounts in Indonesia. They also keep the shares in Indonesia. All gains from those investing activities are transferred to the couple’s shared bank accounts in Indonesia. However, Heny’s salary in Australia was transferred to her bank account in Australia.

In early March 2024, Heny’s father-in-law was sick. Her husband returned to Indonesia to take care of his dad and did not know when he would be back in Australia. The kids however stayed with Heny for their schooling.

Required

In the form of a professional letter (not exceeding 1,200 words), advise Heny on whether she will be classed as a resident of Australia for tax purposes for the 2025 income tax year. In your letter, also advise Henry how her income will be assessed and identify other tax issues given both scenarios of her being deemed a resident or a non-resident of Australia for taxation purposes. Show appropriate referencing to case law, sections of the ITAA 1936 and ITAA 1997 and income tax rulings issued by the Australian Taxation Office. Ignore the impact of any double tax agreement and any DRAFT residency tax rulings.

State the word count.

Assignment Task Two (15 marks)

Joceline Oliver is a 45-year-old woman, divorced, and an Australian resident for tax purposes. Joceline has run a small business (Magic Cleaning) since 2010 in Sydney (NSW), providing cleaning service to households and shopping centers. Joceline’s mother is 71 years old and lives on a disability pension. Due to her mother’s health condition, on 3 October 2024, Joceline moved into her mother’s house in Glendale (regional NSW) to be able to take care of her.

Since then, while Magic Cleaning is still operating, there has not been much revenue generated as most customers are based in Sydney. Joceline wanted some work with an employer so that she could have more time to take care of her mum. On 15 February 2025, Joceline started a customer care job with Lee Woo Tools. For the tax year 2025, Joceline leased the home she owns in Sydney through a real estate agent. She also owns shares in Australian companies.

Details of Joceline’s receipts and payments for the year ended 30 June 2025 are as follows (all amounts are inclusive of GST where applicable):

Receipts

Gross Salary (Lee Woo) (note 1) $47,820
Fully Franked Dividend received (ASX listed company) $320
Unfranked dividend received (ASX listed company) $250
Net Bank Interest received from UK bank (note 2) $700
Gross Rental Income $20,400
Gross Income (Magic Cleaning) $21,800

Payments

• Loan interest, insurance, and management fees on the rental property (relevant to the rental period). $18,300
• Total annual expenses for internet and phone, used 50% for Magic Cleaning and 50% for personal use. $2,250
• 05/03/2023 – purchase of a computer used 50% for Magic Cleaning and 50% for personal purposes. It has an effective life of 3 years. $2,540
• 05/7/2024 – purchase of a calculator used 100% for Magic Cleaning purposes. It has an effective life of 4 years. $70
• 08/07/2024 – purchase of cleaning chemicals and PPE for Magic Cleaning. $1,890
• 01/10/2024 – paid annual subscription on a website for Magic Cleaning. $50
• 15/10/2024 – paid removal costs to Glendale. $3,500
• 10/11/2024 – paid an invoice for fixing wooden stairs of the rental property. It has an effective life of 10 years. $2,400
• 05/12/2024 – purchased and installed a new air conditioner for the rental property. It has an effective life of 15 years. $3,540

Other information:

a. Joceline does not have private hospital cover.
b. Her mother’s disability pension was $11,200 for the tax year, and she did not receive any other income.
c. Joceline used her privately owned Citroen car for business purposes. She purchased the vehicle in September 2021 at a cost of $30,000. For the tax year 2025, Joceline shows records that she travelled 4,500 kms for Magic Cleaning, and 2,500 kms for Lee Woo however she has not maintained a logbook.

Notes:

1. Joceline’s payment summary from Lee Woo also showed the following details:
PAYG Deducted $10,400
Reportable Fringe Benefits $1,100
Reportable Employer Superannuation Contributions $750

2. Amount shown in Australian dollar equivalent (AUD). $100 AUD withholding tax was deducted by the UK institution from the gross interest earned.

Required

Calculate Joceline’s minimum taxable income and her actual tax payable/refundable for the year ended 30 June 2025. Present all workings in a professional manner including brief comments as to why amounts were not included in Joceline’s taxable income. References to relevant case law, ATO rulings and sections of the Income Tax Assessment Acts are NOT required.