Assessment Task – Tutorial Questions
Unit Code: HI6028
Unit Name: Taxation Theory, Practice and Law
Assignment: Tutorial Questions 2
Due: 11:30pm 26th June 2020
Total Assignment Marks: 50 marks
Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in
Unit Learning Outcomes Assessed:
1. Demonstrate an understanding of the Australian income tax system, the concepts of income and
deductions, CGT, FBT, GST general anti-avoidance provisions and income tax administration;
2. Identify and critically analyse taxation issues;
3. Interpret the relevant taxation legislations and case law;
4. Apply taxation principles to real life problems.
Description: Each week students were provided with three tutorial questions of varying degrees of
difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard.
The Interactive Tutorials are designed to assist students with the process, skills and knowledge to
answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for
weeks 6 to 10 inclusive and submit these answers in a single document.
The questions to be answered are:
Mason is a car painter with Melbourne Collision Repair Centre. Mason studying BPA and his employer
pays for his course fees at Holmes Institute costing Mason $12,000. Also, Mason lives in a unit
apartment in Brisbane, which is provided to him by Melbourne Collision Repair Centre as his
employer as fringe benefit. The market value rent for the apartment is $500 per week, and Mason
pays $100 of rent per week for the apartment.
Advise the FBT consequences of Mason’s remuneration package (10 marks, maximum 200 words).
Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September
1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of
construction was $100,000. Immediately, after the construction finished, the property has been
ented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.
With reference to relevant legislation/case law, determine:
a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount
method and Indexation method. (8 marks)
) How would your answer to a) differ if the owner of the property was a company instead of Alex?
(2 marks, maximum 100 words)
Bowens Pty Ltd is a building materials supplier in Victoria. Bowens Pty Ltd has an annual turnover of
$24 million, and works under the accrual method of accounting. Bowens Pty Ltd purchases concrete
mixer for $660 each from Builder’s Choice Pty Ltd, a company in Geelong with an annual turnover of
around $21 million, and works under the accrual method of accounting. Bowens Pty Ltd plans to sell
the concrete mixers at a 200% mark-up to its customers. In October last year it purchased 110 concrete
mixers but in December they discovered that 12 of the concrete mixers were faulty and subsequently
eturned these faulty concrete mixers to the manufacturer, obtaining a full refund. Assume both apply
the accrual method of accounting.
With reference to relevant laws, discuss the GST consequences of this a
angement for both Bowens
Pty Ltd and Builder’s Choice Pty Ltd. (10 marks, maximum 400 words).
Due to COVID-19 impact, Watson Co becomes insolvent and placed into voluntary liquidation by its
directors. Dissolve liquidators have been appointed as the company liquidators. On the winding up of
the Watson Co, Dissolve liquidators have started distributions and Paul as ex-shareholder of Watson
Co received $7,200 from the liquidators, which was inclusive of $3,000 unfranked dividend pursuant
to the provision of Income Tax Assessment Act 1963, section XXXXXXXXXXThis distribution to Paul was from
his $4,000 investment in the shares of Watson Co on 2nd Fe
With reference to relevant provisions of ITAA 97 and ITAA 36, critically analyze the tax consequences
of the above scenario for Paul. (10 marks, maximum 300 words).
Steve and his cousin Alex started an equal partnership business, Euca Sanitizers, motivated by
the increase in the recent demand for hand sanitizers during the COVID-19 pandemic. Steve lives in
Sydney and is an Australian resident for tax purposes. Alex however, is resident of New Zealand and
is a foreign resident for tax purposes in Australia. On 30 June 2020, Euca Sanitizers partnership net
income is $300,000, 60% of this income is generated from selling hand sanitizers to Australian retailers
and 40% comes outside Australia from sale of hand sanitizers to New Zealand retailers.
With reference to relevant provisions of ITAA 97/ITAA 36, discuss how the partnership income is taxed.
(10 marks, maximum 200 words).
The assignment has to be submitted via Blackboard. Each student will be permitted one
submission to Blackboard only. Each student needs to ensure that the document submitted
is the co
Academic honesty is highly valued at Holmes Institute. Students must always submit work
that represents their original words or ideas. If any words or ideas used in a class posting or
assignment submission do not represent the student’s original words or ideas, the student
must cite all relevant sources and make clear the extent to which such sources were used.
Written assignments that include material similar to course reading materials or other
sources should include a citation including source, author, and page number.
In addition, written assignments that are similar or identical to those of another student in
the class is also a violation of the Holmes Institute’s Academic Conduct and Integrity Policy.
The consequence for a violation of this policy can incur a range of penalties varying from a
50% penalty through to suspension of enrolment. The penalty would be dependent on the
extent of academic misconduct and the student’s history of academic misconduct issues.
All assessments will be automatically submitted to SafeAssign to assess their originality.
For further information and additional learning resources, students should refer to their Discussion
Board for the unit.