Case Study: Comprehensive Individual Tax Return Advice

Bala Shrestha, the holder of a Nepalese passport and relevant working visa, arrived in Australia from Nepal in January $2020.$ He started work as an administrator in a Sydney hospital. On $10$ July $2021$ he travelled back to Nepal for personal reasons and worked in odd jobs until $1$ November $2021$ when he returned to Sydney and resumed his position at the hospital. While in Nepal he continued to maintain the apartment which he had bought in Sydney and his Australian bank account. He was on "leave without pay" from his job at the hospital.

During the $2021/22$ income year Bala was paid $$27,200$ for his work in Nepal and $$45,000$ for his work as an administrator in Australia. Nepalese tax of $$2750$ was deducted from his salary. An amount of $$2500$ was also paid for Landcare Levy to the Nepalese revenue department as Bala owned land in Nepal. He was paid a bonus of $$3,800$ from the Sydney hospital on $5$ July $2021$ for his work performed during April to June $2021.$

In the $2021/22$ year he also received $$2,000$ interest on the savings in his Australian bank account and a fully franked dividend of $$700$ from his share investments in the Australian company, Coles Group Ltd$.$

On $1$ July $2022$ Bala left Australia indefinitely to take up a full$-$time position as a senior administrator in a Nepalese hospital. In the $2022/23$ income year, he was paid a salary of $$70,000$ for his work in the Nepalese hospital. Tax amounting to $$9,000$ was deducted from his Nepalese salary. For the $2022/23$ tax year, Bala received interest of $$2,400$ on his Australian bank account and a fully franked dividend of $$900$ on his shares.

Upon leaving Australia, Bala sold all of his furniture and leased the apartment he owns for $$600$ per week. For the $2022/23$ income year he received $$23,400$ rental income.

Required

The following Part A and Part B must be submitted as a single file in MS Word format.

Part A$)$ Calculate Bala's Australian taxable income and net tax payable$/$refundable for the $2021/22$ and $2022/23$ tax years including all possible tax offsets. You must give reasons for the inclusion or exclusion of all receipts in the assessable income. Refer to relevant legislation and case$($s$)$ to determine his residency.

Part B$)$ Advise Bala regarding foreign tax paid in Nepal for the $\frac{2021}{22}$ tax year only. Calculate the foreign income tax offset amount. Do not copy and paste instructions from the ATO site. You must give your own explanations.