PART C: Individuals and Residency

Question 1

Your manager has asked you to prepare Josie’s IR3 taxation return for the year to 31 March 20x2 based on the following information.

During the 20x2 taxation year her income details were as follows:

Required:

Complete the tax calculation sheet and the IR3 for Josie for the year ended 31 March 20x2.

Question 2

Josie’s eldest son Freddie arrived in New Zealand on 23rd December 20x0 after an absence of 3 years, working in the United States as a ski instructor. Freddie spent the Christmas period with Josie and the rest of his family before travelling around the South Island to catch up with friends.

Whilst in the South Island, Freddie managed to secure a job at Mt Hutt as a ski instructor for the upcoming NZ ski season. He returned to the States on 17th January 20x1 to resume his job.

Freddie returned to NZ on 24th May 20x1 and commenced his job at Mt Hutt ski field on 1 June 20x1.

He worked at Mt Hutt for the entire ski season and returned to the United States on 31 October 20x1 (in time for the start of the US ski season).

Required:

Determine Freddie’s residency status for the periods mentioned above. Include in your answer reasons, and relevant dates and the consequences of the residency status you have determined.

Please note: For the purposes of this question only consider New Zealand tax residency requirements, there is no need to take into consideration tax laws from the United States.