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MIT Taxation Law MA613 Semester XXXXXXXXXX Individual assignment This is an individual assignment, students are able to research this assignment online. Submission will be online. Writing should be no...

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MIT

Taxation Law MA613

Semester XXXXXXXXXX

Individual assignment

This is an individual assignment, students are able to research this assignment online. Submission will be online.

Writing should be no more than 2,000 works, and can take the format of a report, whereby the 5 different questions are answered.

Due Date: Friday 10th June, 2020.

Individual assignment 20%

Purpose: To read and report on a Tax Ruling by the ATO.

· The purpose of the assignment is to encourage students to access the considerable the resources of the ATO by using the internet.

· Students are to choose from one of the topics and find a ruling or rulings on that topic and make some pertinent comment from a reading of information supplied by the ATO.

· The topics suggested are part of the course to be taught this semester.

· Marks will be given on the basis of a student’s:

Ø Evidence of reading and understanding of the topic

Ø The making of relevant comments on important aspects of the topic

Ø Presentation and expression in each response.

Choose from one of the following topics

5. TR 98/9 Tax ruling regarding self-education expenses.

Students are to answer each of the following 5 questions

1. Explain essentially what the ruling is about under taxation law principles.

2. Explain the issue addressed by this ruling, ie why is there a ruling on this topic, are there particular arguments over the topic matter between the ATO and individual taxpayers?

3. What common law or existing legislation does the ruling refer to? Explain briefly.

4. Did the ruling give examples, and clearly explain the issues and how the ruling determines the law?

5. How useful is this ruling for tax planning purposes?

Answered Same Day Jun 08, 2021 MA613

Solution

Swati answered on Jun 09 2021
132 Votes
Tax ruling regarding the use of work-related clothing
Introduction
Under section 8-1 of ITAA (Income Tax Assessment Act0, 1997, this ruling states the conditions wherein uniform, footwear and clothing along with associated maintenance cost related to work are allowed for deductions.
This ruling also discusses as per FBTAA 1986 (Fringe benefits tax assessment act), any employer’s fringe benefits tax liability to provide support to employees for uniform, footwear and clothing.
Under taxation law principles, this ruling gives a clear picture of what cost and expenses towards clothing, uniform, shoes are deductible and what is not deductible as per the law.
Class of a
angement/person
Application of this ruling extends to the individuals who are either in receipt of withholding payments as per ITAA 1997 subsection 44-5(3) or are employees as well as the ones who incur expenses associated with work related uniform, clothing and footwear. Also, the employers providing benefits in relation to clothing, footwear and uniform to employees are covered under this ruling.
Effect Date
Years commencing both before and after its issue date are covered under this ruling. But, extent of this ruling does not cover the taxpayers where there is conflict with settlement terms of a dispute agreed to before the issue date of this ruling.
Partial withdrawal applies from 11 June 2003, since when withdrawal to this ruling was issues.
Ruling
Deductibility test must be satisfied by the clothing, footwear and uniform expenditure in order to be deductible as per section 8-1 of ITAA 1997.
Also, it must not be excluded from deduction by the ITAA 1936 section 51AH or by ITAA 1997 Division 34.
There must be expenditure deductibility only when there is enough connection between the clothing and assessable income associated activities so as the essential character of it is not domestic or private in nature but is related to work. All facts are the deciding variables but still this Ruling helps to
oadly provide principles that help in determining question in any case.
Costs associated with clothing laundering, renting, repairing, buying, dry cleaning as well replacing are naturally private. Only exceptions are where expenditure is directly attributable to taxpayer’s income earning activities,
Work related expense deductibility
Work related expenses are deductable when expense is incu
ed and meets the deductibility tests along with satisfying the substantiation riles that are applicable to employees. Also, it must not be excluded from deductibility under D34 of ITAA 1986 or 51AH ITAA 1997.
Need of ruling
Ruling over the uniform, clothing, footwear associated with the workplace was much required as in absence of this ruling; the deductible and non deductible criteria will be missed out leading to unethical use of law.
Also, the dress, uniform or clothing of conventional, private, capital or domestic nature will also be claimed in absence of ruling TR97/12 causing much loss to the employer and tax payers as well.
Hill J said in Mansfield’s case under ATR at 375; 96 ATC 4001 at 4008 that the only fact of having a particular clothing to be used by a profession or in an occupation does not mean necessarily that expense incu
ed on that clothing form has deducibility.
Generally expenditure on any ordinary articles of apparel will not come under deductibility that does not mean that these kinds of expenses are required to ensure suitable appearance in specific profession or job. An employer may require his employees to be dresses in appropriate way but that does not make it deductible in any way.
Another case- Cooper’s case 91 ATC 4396 states that it is not enough that the taxpayer will not be able to
ing activity engagement from which derivation of his income unless there is incu
ence of expenditure.
Case T47 in 1968 states...
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