Explain the income tax implications

Trevor is 22 years old and was born in England. He had the following transactions:

(1) On 1 April 2015 he moved to Australia to take up a 2 year appointment with an Australian bank after working for the English subsidiary of the bank for 3 years in London. He lives rentfree in a house owned by the bank. He has a bank account in England, however he openedup a bank account in Australia so that his salary can be deposited into the account. Being akeen footballer, he joined a local football club and plays in local competitions once a week.His salary from the bank totalled $130,000 for the year. He also earned $300 in interest fromhis English bank account. (5 mark)

(2) On 1 May 2015, Trevor bought a large sculpture at a weekend market for $450 and spent$150 to transport it to his house. He put the sculpture in his garden since then until he sold itfor $2,000 in August 2015. [3 marks]

(3) He has several lemon trees in his Australian garden. Due to an abundance of lemons, Trevorallowed his friends to enter the property and pick as many lemons from the trees as theywanted. His friends pay Trevor $0.20 per lemon picked from the trees. [4 marks]

(4) Once a week his football team acknowledges its most valuable player of the game. Over theseason Trevor has been most valuable player on seven occasions. As a sponsor of the footballteam, Trevor’s employer has donated the prizes to give to the most valuable player. To dateTrevor has received several bottles of wine and a large serving plate with his name, team andthe year painted on the back. [3 marks]

(5) On 1 August 2012, before he came to Australia, Trevor purchased 10 hectares of land for $1min Sydney that was suitable for subdivision. At the time of the purchase, he intended to getapproval from the council to subdivide the land onto 50 blocks and then sell them for a profit.In the meantime Trevor leased the property for grazing horses. On 30 May 2015, the councilrejected his application to subdivide the land. Trevor sold the land for $3m without anysubdivision on 30 June 2015 with the purchase money to be 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 support of your answer.


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