Chloe was born and raised in Canberra. Her parents were both born in Sydney. She moved to Canberra in 2013 to study at the Australian National University (ANU) and graduated with a Bachelor of Commerce from the ANU in December 2015. Chloe obtained employment with the audit section of KPMG in Canberra in early 2016. Using funds inherited from her wealthy grandmother, Chloe bought an apartment in New Acton, Canberra. The contract was signed on 5 March 2016 and ownership was transferred to Chloe on 5 April 2016. The purchase price of the apartment was $700,000. Legal expenses associated with the purchase were $2,000. No stamp duty was payable as this was Chloe’s first home purchase. Chloe worked at KPMG until June 2017. She then decided to take a 12-month leave of absence from KPMG so that she could enjoy an extended holiday in the UK (her sister lives in London). Chloe hires an agent to rent out and manage her New Acton apartment while she is overseas. Chloe arrives in London on 1 July 2017 on a five-year ancestry visa (her paternal grandparents were born in England) and commences living with her sister, brother-in-law and niece in their London apartment. She is given one bedroom for her exclusive use. In London, during the period July to December 2017, Chloe spends her time relaxing and reading, visiting places of interest (museums, libraries), and also spends many hours looking after her four-year old niece. In January 2018, Chloe travels to Rome for three months to undertake an intensive Italian language course. She returns to London in April 2018, and then travels to Spain for a monthlong tour in May 2018. In June 2018 she comes back to London and during the course of that month decides to settle in London for a few years. In late June 2018 Chloe received a job offer from PwC in London and advised the Canberra KPMG office that she would not be returning and tenders her resignation. At the start of July 2018, Chloe begins working in the audit section of PwC in London. She continued to live with her sister, brother-in law and niece, and contributes to groceries and utilities. She was enjoying her life in London and in October 2019 Chloe instructed her agent to sell her New Acton apartment. A contract of sale was signed on 18 November 2019. The agreed sale price for the apartment was $800,000. Ownership was transferred to the new owner on 31 December 2019. Chloe was living happily in London until very recently. In late February 2020, Chloe became anxious about the capacity of the English hospital system to cope with an imminent health crisis and decided to return to Australia. She finished her employment at PwC in London at the end of February and returned to Canberra on 9 March 2020. That same day Chloe obtained toplevel premium healthcare cover from Medibank Private Ltd and contacted her former employer KPMG about any work opportunities. KPMG advised that they were happy to have her back, TAX LAW – TAKE HOME EXAM but she could only start in July 2020 as the firm had suffered a substantial decline in client work and did not expect the situation to get better for a few months. Chloe is currently living with her Aunt in her Aunt’s apartment in the Kingston Foreshore. She plans to buy her own apartment in July once she starts working at KPMG. Chloe tells her Aunt that, although she had a lovely time in London for the most part, she will now settle in Australia. Noticing that the ASX is very volatile, Chloe decides to execute a short-term share trade. She bought 100,000 shares in Mayne Pharma Ltd on 19 March 2020 at a price of 21 cents per share. She sells this parcel on 1 April 2020 for 36 cents per share. She incurs brokerage of $40 on the purchase and $40 on the sale. Chloe’s New Acton apartment had been leased to tenants until the end of September 2019. In the period July to September 2019, Chloe received $2,500 rent per month. Chloe also paid Council rates on the property: $400 in September 2019 and a further $400 payment in December 2019. In the period July 2019 to February 2020, Chloe earned 3,500 pounds per month from her London PwC employment. INSTRUCTIONS: 1. Discuss Chloe’s residency status under Australian tax law in the 2017/2018, 2018/2019 and 2019/2020 income years; 2. Based on the above information, what is Chloe’s taxable income in Australia (if any) in 2019/2020? Outline all your reasons. Provide explanations and cite relevant law; 3. Based on the above information, calculate Chloe’s final tax liability (if any) under Australian tax law in 2019/2020.