Fiona Parsons, aged 35, lives in Melbourne and works as a management consultant. She is employed by Staedler Ltd, an American company specialising in the development of information systems for the publishing industry. In March 2019 Staedler won a tender contract to install a new computer system for EZI Ltd, located in Singapore. As a result, on 1 April 2019 Fiona was posted to Singapore for one month to arrange installation of the system. Due to technical difficulties in the installation, Fiona’s stay was extended by a further three months. Initially her salary of $8,000 per month was paid into a bank account in Melbourne. However, from 1 May 2019 her salary was paid into a Singapore bank account.

Upon completion of her work in July 2019, EZI presented Fiona with two airline tickets and vouchers for a holiday in London valued at $8,000. EZI also offered Fiona a three-year consulting job with the company with an annual salary of $100,000 and a car. As an incentive to join EZI, and to compensate for her leaving Staedler and having to move permanently to Singapore, she was offered $40,000. This was to be paid in two instalments—$20,000 on joining the firm and $20,000 after one year of service. Fiona accepted the offer on 1 September 2019.

Required:

Advise Fiona as to the assessability of the above amounts in Australia for the tax years 2018/19 and 2019/20. Refer to relevant legislation and case law to support your arguments for and against before arriving at your conclusion.

Answer rating: 100% (QA)

Answer The issue during this question regards whether or not the amounts received by Fiona ar assess... View the full answer