Kalinda is currently studying architecture at Moonush University in Australia. Born in London, United Kingdom, Kalinda moved to Melbourne, Australia with her parents and brother when she was three years old and has been living in the country since then. In December 2020, Kalinda is offered an internship by Moonush University to complete an architectural project on classical temples and ancient roman buildings in Italy. Kalinda accepts the internship and heads to Italy in January 2020. The internship is for 6 months, where she is offered a place to stay in a family home as an “exchange” student and is provided with some meals. 

To support herself, Kalinda is paid a monthly salary of $4,000 by Moonush University to write reports of her architectural project during her stay in Italy and receives a dividend income of $300 every quarter from shares she holds in an Australian company. In July 2021, Kalinda decides to extend her trip and stay in Italy until December 2022, where she stays in a fully furnished leased apartment, leases a car, and opens an Italian bank account. She also finds employment in a small Italian architecture firm and continues to receive dividend income from the shares she holds in the Australian company. Kalinda’s parents and brother remain in Australia for the entire time she is in Italy. She only visits her family in Australia at Christmas time and on special occasions, such as her brother’s birthday.

Required: 

In respect of the 30 June 2021 income year only, advise Kalinda on the residency and source issues that arise from the above facts, and determine what amounts will form part of her assessable income. Please support your answer with relevant legislation and case law.

Answer rating: 100% (QA)

Kalinda is considered a resident of Australia for tax purposes because she has been living in the co... View the full answer