On 10 July 2014, Jim Morris was transferred to the Tokyo office of his company, Worldwide Australia Ltd, for five years. His wife Mandy accompanies him to Tokyo. In Tokyo they lived in an apartment owned by the company and leased their Melbourne residence. While residing in Tokyo Mandy borrowed $100,000 from Westpac Bank on December 2014, to fund the purchase of $50,000 shares in Worldwide Australia.

During the 2014/2015 tax year many received $10,000 as her share rental income from lease of their Australian home, and $2,500 in fully franked (taxed) distributions from Worldwide Australia. She incurred no expense in deriving the rental income, but her interest payments on the Westpac bank loan amounted to $5,550.

What are Australian tax consequences of these transactions for Mandy Morris?

Answer rating: 100% (QA)

Rental Income 10000 rental income from the lease of their Aus... View the full answer