Assignment – CLWM4100 Taxation Law – Trimester XXXXXXXXXX
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Subject Code: CLWM4100
Subject Name: Taxation Law
Assessment Title: Individual case study assignment
Weighting: 20%
Due Date: Sunday 11.30pm AEST of week 9
ASSIGNMENT ASSESSMENT 3 INFORMATION
This case study must be presented as an individual effort. The case study requires individual
esearch using a range of tax resources. It is expected the student will survey the relevant
literature, including decided cases, and select appropriate additional resources.
The case study is designed to incorporate uncertainty. The student is expected to develop a
piece of work which is written advice for their client. It must therefore identify the facts and
issues presented by each aspect of the case study, identify and apply the relevant legislation
and/or case law, come to a conclusion and make a recommendation as to the most appropriate
application of the relevant law to the circumstances to the client.
This assessment assesses your research skills, your ability to synthesise an original piece of work
to specific content requirements and your ability to produce a comprehensible piece of advice
which addresses the client’s needs.
It also assesses your written communication skills. The ability to deliver a
ief is an essential skill
in the workplace. Clients may well approach advisors seeking a combination of specific
information needs and advice on the tax implications of a particular a
angement in the
Australian tax jurisdiction. It is therefore important to be able to identify all the issues presented
y an a
angement and to think about the potential consequences of different approaches to
addressing the client’s needs. Your case study is not just a list of answers. Your reasons for your
conclusions and recommendations must be based on your research into the relevant cases and
legislation.
Assignment – CLWM4100 Taxation Law – Trimester XXXXXXXXXX
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Elwood Blues is an Australian resident for tax purposes and one of your best clients. Elwood has a
varied portfolio and usually has a number of interesting questions to ask about the tax implications of
various undertakings he has been involved in. This year is no different, Elwood has the following
questions and he requires your analysis and advice as to the application of the law
Part 1- Starting a new business
Elwood has started a new business venture. He has started an international shipping company based in
Singapore. There are 4 directors:
• Two are located in Singapore
• One is located in Monaco, and
• Elwood.
All the director’s meetings are held in Singapore and the annual general meeting is held in Monaco.
The company’s main business is shipping containers between Sydney and Africa, via Singapore. The
contracts are signed in Sydney on behalf of the company by Elwood.
The company has a rotating Managing Director with the role changing every three months between the
directors. The shares are held only by the directors and are held in equal proportion.
Elwood would like to know:
Is the company a resident of Australia for tax purposes?
Part 2 – Sale of assets
Elwood has sold the following items
1. A car he bought 3 years ago for $65 000 and was used solely for his personal use was sold for
$ XXXXXXXXXXThe book value of the car is $27500
2. Vacant land sold in June 2018 for $200,000 that had been bought by him on 21/3/1984 for
$20,000. This is being paid in 10 instalments of $20 000, however the purchaser has declared
ankruptcy and the last two instalments due next financial year will not be paid.
3. 10,000 shares in ABC Ltd sold in Fe
uary 2017 for a total sale price of $175,000. Elwood bought
all the shares for long term investment purposes during November and December 1994 at a total
cost of $80,000.
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4. An antique sold on 1 May 2018 for $15,000. Elwood bought the antique on 31 December 1989 at
a cost of $5,000 for personal reasons.
5. Jewellery sold in July 2017 for $5,000. The jewellery was purchased for 29/09/09 for $20,000.
6. Shares in XYZ Ltd were sold on 1/10/2017 for $ XXXXXXXXXXThese shares were purchased for long
term investment purposes on 31/10/1998 for $41500.
7. Elwood has interests in many businesses. One particular business is a clothing store. This store
imports a lot of clothing from overseas and is entitled to a concessional rate on the customs duty
for a quota (a particular quantity) of protective clothing. However, this protective clothing was
not selling well so Elwood sold the quota to another business for $ XXXXXXXXXXThe value of the quota
at purchase 5 years ago was $ XXXXXXXXXXElwood also has to pay an annual fee of $5000 to renew
the quota.
Advise Elwood as to the tax implications of each of these disposals and calculate any amounts required
to be declared in his tax return.
Part 3 General deductions
Elwood is keenly promoting a car made in Fiji which runs on overproof alcohol. However, the Federal
Government has decided this is undesirable and has imposed a new, strict limit on the number of cars
which can be imported. Elwood is Fijian and is hopping mad about this. He has launched a media
campaign, costing $175 000, attacking this restriction and demanding its removal claiming it is an unfair
estriction on his business structure and is undermining freedom of product choice.
Elwood has bo
owed a significant amount of money to set up the structure to import the cars, buy and
fit out showrooms and provide the after sales support for the cars.
Elwood wishes to know whether the:
• interest on the loan, amounting to $250 000, will be deductible. He took the loan out after
confirmation from both governments the importation could go ahead, however he did not have
a showroom at this time. He acquired the showroom before the first cars a
ived.
• costs of the media campaign are deductible.
Please advise Elwood
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OTHER IMPORTANT INFORMATION
Required:
This assignment is to be completed by individual students. All questions, must be attempted.
The assignment must be submitted before the above due date to avoid any late penalties. Please
make sure you follow the usual assignment presentation guidelines especially those relating to
presentation of written work, late policy and academic integrity.
Please note that a word limit exists for all questions. Submissions that exceed the word count
(50 words per question) by more than 10% will cease to be marked from the point at which that
limit is exceeded.
Submission:
The assignment will need to be submitted electronically through the student portal – use the
link under “Assessments” to submit the information.
Referencing:
Any sources that you use need to be acknowledged in order to avoid plagiarism. Information
on referencing can be found in the Guidelines for Referencing and Presentation at the Kaplan
website.
In-Text Referencing and the Reference List:
Sources of information must be cited both in the body of the text (in-text referencing) and the
end of the assignment (reference list). Failure to do so will result in penalties. Any documents
or books or other references you use will require referencing.
Penalties Regarding Referencing:
No in-text referencing – deduct 1 marks
Some in-text referencing only – deduct 1 mark
No reference list – deduct 2 marks
Incomplete reference list – deduct 1 mark
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Assignment – CLWM4100 Taxation Law – Trimester 2 2018
Individual case study marking ru
ic
Student Name: