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LAW6001 Assessment 3 Case Study Page 1 of 7 ASSESSMENT BRIEF Subject Code and Title LAW 6001 Taxation Law Assessment Assessment 3: Case Study Individual/Group Individual Length 2000 words +/- 10%...

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LAW6001 Assessment 3 Case Study
Page 1 of 7


ASSESSMENT BRIEF

Subject Code and Title

LAW 6001 Taxation Law

Assessment

Assessment 3: Case Study

Individual/Group

Individual

Length

2000 words +/- 10%

Learning Outcomes

This case study must be presented as an individual effort. The
case study requires individual research. The course manual
and set texts are intended to be the starting point of the
esearch. 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 to the
client.
Specific learning outcomes

) Explain ethical and professional responsibilities of tax
agents under the including obligations under the Tax Agent
Services Act 2009 (TASA) and Tax Agent Services Regulations
2009 (TASR).
c) Interpret and apply selected sections of the Income Tax
Assessment Act ITAA36 and ITAA 97.
d) Identify and analyse the tax treatment of various types of
income and deductions.
e) Effectively apply taxation law in determining tax outcomes
in various scenarios and structures.
Submission

By 11:55pm AEST/AEDT Sunday of Week 10

Weighting

20%

Total Marks

50 marks


LAW6001 Assessment 3 Case Study
Page 2 of 7
Context
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 addressing the client’s needs.

It also assesses your written communication skills. The ability to deliver to 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 by an a
angement and to think about the potential consequences of different
approaches to addressing the client’s needs.

Instructions:

Your case study needs to identify and discuss the tax implications of the various issues
aised. In order to produce your case study, you will need to review relevant case law and
legislation. The subject manual and set texts are starting points only, you will be expected
to use these initial materials to identify potential useful resources. You will then need to
eview your selected resources to see if they value add to your analysis.

Your case study is not just a list of answers. Your reasons for your conclusions and
ecommendations must be based on your research into the relevant cases and legislation.



LAW6001 Case Study T2 2018
Question 1 (10 marks)
With reference to the UK Australia Double Tax Agreement explain:

a) the meaning of the term Permanent Establishment.
) how the business profits of an enterprise incorporated in the UK are taxed in Australia.
c) whether contracts made through an independent agent would result in a Permanent
Establishment

Question 2 (10 marks)

Andrew McSwington is a highly regarded MLB prospect born in Adelaide. During the
Australian off season he first travelled to Mexico to play in the Fall League for 2 months and
then went to America to play in the minor leagues for 15 months. He signs the contract
stipulating he is to be paid $ XXXXXXXXXXfor the 15 months in Adelaide and joins the minor league
team shortly after. The contract states he is to be paid monthly into a bank account in the
Turks and Caicos Islands

Andrew decides to purchase a home in America to use it as a base during the home and away
series and rent it out for the remainder of the income year when he returns to Australia.
LAW6001 Assessment 3 Case Study
Page 3 of 7
Discuss with reference to relevant case law:

1. Whether Andrew a resident of Australia for tax purposes
2. The source of the $ XXXXXXXXXXpaid for his baseball skills
3. Whether he is liable for taxation in Australia on the $145000 for his baseball skills
4. Whether Andrew is liable for tax on the rental income received from America during
the balance of the year


Question 3 (15 marks)

What is the “first strand” of the decision in FC of T v The Myer Emporium Ltd 87 ATC 4363? Did
the courts apply the first strand in Westfield Ltd v FC of T 91 ATC 4234 ? Compare and contrast
the decisions in FCT v Myer and FCT v Westfield and suggest an explanation for the difference
in the Court’s decisions.

Comment on whether the decision support the distinctions made between income and capital
in the Australian taxation system.



Question 4 (15 marks)

a) With reference to Softwood Pulp and Paper v FCT 1976 explain whether a deduction
is available for interest paid on a loan during the preparatory stages of a business.

) With reference to Ronpibon Tin NL v. Federal Commissioner of Taxation XXXXXXXXXX
CLR 47 explain the importance of the ‘incidental and relevant test” in determining
whether interest paid on loans in deductible.

c) With reference to FC of T v. Brown 99 ATC 4600; XXXXXXXXXXATR 1 explain whether
interest paid on loans can be deductible after business activities have stopped

d) Comment, with reference to the Tax Agent Code of Conduct, on the role the tax
advisor has in ensuring their client’s compliance with all relevant taxation laws,
particularly in terms of interest deductions after business activities has ceased.
LAW6001 Assessment 3 Case study
Page 4 of 7
Learning Ru
ics

Assessment
Attributes
Fail (Unacceptable)
Pass
(Functional)
Credit
(Proficient)
Distinction
(Advanced)
High Distinction
(Exceptional)
Grade Description
(Grading Scheme)
Evidence of unsatisfactory
achievement of one or more of the
learning objectives of the course,
insufficient understanding of the
course content and/or unsatisfactory
level of skill development.
Evidence of
satisfactory
achievement of
course learning
objectives, the
development of
elevant skills to a
competent level, and
adequate
interpretation and
critical analysis skills.
Evidence of a good
level of
understanding,
knowledge and skill
development in
elation to the
content of the course
or work of a superior
quality on the
majority of the
learning objectives of
the course.
Demonstration of a
high level of
interpretation and
critical analysis skills.
Evidence of a
high level of
achievement of
the learning
objectives of the
course
demonstrated in
such areas as
interpretation and
critical analysis,
logical argument,
use of
methodology and
communication
skills.
Evidence of an
exceptional level of
achievement of
learning objectives
across the entire
content of the
course
demonstrated in
such areas as
interpretation and
critical analysis,
logical argument,
creativity, originality,
use of methodology
and communication
skills.
Knowledge and
understanding




Limited understanding of required
concepts and knowledge

Key components of the assignment are
not addressed.
Knowledge or
understanding of the
field or discipline.

Resembles a recall or
summary of key ideas.

Often
conflates/confuses
assertion of personal
opinion with information
substantiated by
evidence from the
Thorough knowledge
or understanding of the
field or discipline/s.
Supports personal
opinion and information
substantiated by
evidence from the
esearch/course
materials.

Demonstrates a
capacity to explain and
apply relevant
concepts.
Highly developed
understanding of
the field or
discipline/s.

Discriminates
etween assertion
of personal opinion
and information
substantiated by
obust evidence
from the
esearch/course
A sophisticated
understanding of the
field or discipline/s.

Systematically and
critically discriminates
etween assertion of
personal opinion and
information
substantiated by
obust evidence from
the research/course
materials and
extended reading.
http:
www.tua.edu.au/media/50742/a240_grading-scheme.pdf
LAW6001 Assessment 3 Case study
Page 5 of 7








XXXXXXXXXX%









XXXXXXXXXX XXXXXXXXXX
esearch/course
materials.







15-19.4









XXXXXXXXXX
materials and
extended reading.

Well demonstrated
capacity to explain
and apply relevant
concepts.

XXXXXXXXXX

Mastery of concepts
and application to
new situations/further
learning.



XXXXXXXXXX
Critical reasoning,
presentation and
defence of an
argument and/or
position


















XXXXXXXXXX%


Specific position (perspective or
argument) fails to take into account
the complexities of the issue(s) or
scope of the assignment.

Makes assertions that are not
justified.













Answered Same Day Aug 07, 2020 LAW6001 Torrens University Australia

Solution

Rashmi answered on Aug 11 2020
146 Votes
8
Name
Class
Instructo
9 August, 2018
1. a. According to the UK Australia double taxation agreement, Permanent Establishment is the fixed place of business from where an enterprise shall continue its business operations wholly or partially. It shall include, an office,
anch, an agricultural property, a factory a mine or a well. A business enterprise shall be considered as a permanent establishment in the contracting company if it has undertaken any installation project or provide supervision or consultancy service in such a site or project for 12 months or above, engaged in the business of renting substantial equipment other than for hire purchase for a period more than 12 months, if any person on behalf of the business enterprise is engaged in manufacturing or processing of good or merchandise (EYGM, 2015).
. The business profit of enterprise, as defined by UK Australia double taxation agreement, the incorporated in UK shall be taxable in Australia only if the enterprise is doing business through a permanent establishment in other contracting company that is Australia. The profit will be taxed proportionately to the extent allocated to the permanent establishment that is situated in Australia. For calculating the business profit deduction will be allowed for that expensive that are incu
ed by the enterprise for the purpose of the permanent establishment. The allowable expenses shall include the general and executive administrative expenses incu
ed in Australia or elsewhere.
c. If any establishment is ca
ying on any business in the contracting state by way of appointing or engaging any
oker or agent then it shall not be deemed to have a permanent establishment in that other contracting state unless that
oker or agent is acting in their normal course of business. If a person is authorized by the enterprise to ca
y on business in the name of the business then only the enterprise shall be considered to have a permanent establishment there in the contracting state (The Government of United Kingdom, 2003).
2. According to Taxation Law, an individual shall only be considered to be the resident of the contracting state where it has a permanent home. As per article 16 of the double taxation agreement, entertainers and sports persons who are resident of a contracting state, derives income from such entertainment activity for sports league in any other contracting state then it shall be taxable in the other contracting state (EYGM, 2015). The income derived from America having source of income in America shall be taxable in America only. Therefore the income of $145,000 is not taxable in Australia for his Basketball Skills. The source of income for the resident of Australia for $145,000 which is earned as a sports person in America shall be taxed in America and the source of income shall be deemed to be America.
If the resident of a contracting state is having a property in another contracting state and thereby earns a rental income on that property which is let out during the financial year shall be taxable in the hands of the president in the contracting state. Andrew McSwington, born in Adelaide, is visiting America for minor League for 15 months. He decides to purchase a home in America to use that as a base during the matches. When he will return to Australia the house will be given on rent for the remainder period of the income year. It is clear that the purchased home in America is not a permanent home, it is being used for temporary purpose. Therefore, the rental income received from America for the home purchase in America shall be liable to tax as other sources.
3. In FC of T v The Myer Emporium Ltd 87 ATC 4363, the decision in accordance with the first strand states that the income derived from proceeds of loan assignment in an income receipt and also a profit from any profit making scheme under...
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