50.1K

Verified Solution

Link Copied!

Tom Cahill is an adult individual and semi-professional soccer player who returned to Adelaide from England on 6 July 2022. He had been in England playing soccer for the Cheltenham Town club that has a team in the Football League One division, which is below the national Premier League that is played in that country. Prior to leaving Australia on 21 July 2021, Tom had been playing soccer for 5 years as a semi-professional in the Adelaide Amalgamated team, the only local soccer club that plays in the Australian National Soccer League. He started playing for that club in Adelaide at the age of 15 after having spent most of his childhood and youth recreational time pursuing his passion for soccer here.

It was while Tom was playing in an Australian National Soccer League game that he was spotted by a talent scout from the English Cheltenham Town club. Tom was then signed up by the club under a contract that was negotiated and made in Adelaide. The contract required that Tom be released from any contract he had to play for Adelaide Amalgamated, travel to England and start training exclusively for the Cheltenham Town club and for no other club. In return, the Cheltenham Town club agreed to pay Tom a lump sum sign on fee, and to provide him accommodation during the period he trained for the club. Also in return for Tom signing with the club, it agreed to offer to engage Tom for a 1 year period as an employee player for the club, but only if he met certain training, performance and attitude benchmark requirements set by the club. The terms of the engagement would also include an option, which the club could exercise, for the playing period to be extended for a further 4 years.

Before leaving Australia, Tom vacated and leased out his apartment that he owned in Adelaide in which he had lived. Tom also owned a BMW coupe car, shares in the Adelaide Bank Ltd and apartment furniture, all of which he sold to raise funds for his stay in England. He kept a bank account with the Adelaide Bank into which his rental payments were to be deposited and from which rental expenses were to be paid. When he left Australia, Toms intention was to remain in England for as long as he could sustain a successful playing career, and to return home to Australia at his careers end. On leaving, he was accompanied by his parents who were concerned to see him settle in to his new club and his new townhouse accommodation in England. Once this had happened, they returned home to Adelaide.

After Tom had settled into his new club and townhouse accommodation, he set about meeting the clubs training, performance and attitude benchmark requirements. He so impressed the clubs officials that in late August 2021 he was offered the engagement to play for the club, as had been agreed under his sign on contract. Under the terms of his employee player engagement contract, Tom was entitled to match payments of $5,000 per game played and a bonus payment of $10,000 for each goal he scored. As an additional incentive for the clubs 3 Assignment IT M - 2022 Sem 1 players to perform at their best, the agreement terms also stated that players were eligible for a best on ground cash award of $20,000 that was to be paid by the clubs leading sponsor. Having entered his employee player engagement contract, Tom was allowed by the club to remain in the townhouse accommodation provided by it on a rent free basis. Toms start to the playing season in September 2021 was most promising as he scored 1 goal in each of his first, fourth and ninth games. He was also best on ground in the fourth game he played. However, during his tenth game Tom collided with another player and seriously injured his knee. As a result, he was not able to play any more games for the season. Worse still, subsequent tests on his knee showed that it could not fully recover from the injury and so the club decided not to renew his playing period after the initial 1 year. On learning of this, Tom immediately left England and returned to Australia after only 11 months away.

During the income year ended 30 June 2022, Tom received and derived the following:

1 Match payments totalling $50,000 from the Cheltenham Town club for the 10 games in which Tom played.

2 Bonus payments totalling $30,000 for all the goals Tom scored in those games.

3 The best on ground award of $20,000 from the clubs leading sponsor whose motive was to advertise the sponsors business.

4 $25,000 as the lump sum sign on fee from the club that Tom then used to pay his air fare and relocation costs, as well as air fares for his parents. After paying these costs, he had $5,000 left.

5 Additional periodic and regular payments from the clubs insurer totalling $60,000 as compensation to replace match payments Tom was not able to earn because of his injury.

6 A further lump sum payment of $100,000 from the clubs insurer as compensation for a loss of income earning capacity resulting from the injury.

7 The rent-free townhouse accommodation that had a market value of $20,000. It was a condition of his accommodation that he could not part with its possession.

8 $30,000 from the sale in July 2021 of his BMW coupe car. Tom bought the car in July 2018 at a cost of $55,000 for his personal use.

9 $50,000 from the sale in July 2021 of his shares in Adelaide Bank Ltd. Tom had bought the shares in June 2016 at a cost of $30,000. They were originally acquired as a long term investment for their dividend yield, but Tom sold them because of his move to England.

10 $5,000 from the sale in July 2021 of his apartment furniture, all of which Tom had acquired in June 2015, when he bought his apartment, at a cost of $15,000.

11 Rent totalling $25,000 from the lease of Toms apartment in Adelaide while he was in England.

12 An amount of $10,000 that Tom unexpectedly received from his grandparents on the eve of his departure from Adelaide. The amount was given to help Tom set himself up in England. Cash amounts have been converted into Australian dollar amounts where relevant.

Answer & Explanation Solved by verified expert

See Answer