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LAWS XXXXXXXXXXTaxation Law of Australia TERM 1, 2018 ASSESSMENT 1 - INDIVIDUAL ASSIGNMENT Marks: 40% of the overall assessment for the course Submission: Online via Moodle Format: One file in .doc or...

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LAWS XXXXXXXXXXTaxation Law of Australia TERM 1, 2018
ASSESSMENT 1 - INDIVIDUAL ASSIGNMENT
Marks: 40% of the overall assessment for the course
Submission: Online via Moodle
Format: One file in .doc or .docx (MSWord) format.
Submissions in any other file format (e.g. .zip) will be treated as a non-submission. Word limit: XXXXXXXXXXwords
Due date extended: Return to students:
Extensions policy:
The university policy on extensions of time will be strictly enforced. Extensions will usually only be considered if made via the online system and based on medical or compassionate grounds. Any extension application should be made before the due date for submission. Medical conditions should be supported by a medical certificate, and, since students are expected to start the assignment early, temporary or last- minute conditions are usually not grounds for an extension. Professionals are expected to manage their time to meet their obligations, so work or personal commitments are insufficient grounds for an extension.
Plagiarism:
The university’s plagiarism policy will also be strictly enforced. If plagiarism is found, a minimum penalty is likely to be zero marks for the assessment. It could be worse.
This assignment is the only assignment for this course, and it ca
ies a weighting of 40% of the total assessment for the course.
While the assignment is largely based on material covered, you are free to research and seek advice as widely as you find necessary—there are no limitations as to sources. However, you must make sure that sources are appropriately referenced.
Objectives
This assessment item links to the unit objectives as stated in the Unit Profile.
Details
This assignment is to be submitted in one (1) Word document only. This assignment is to be submitted online via Moodle by the due date stated. It is suggested that where necessary you put your calculations into columns or tables to improve readability in the assignment document
The method of referencing to be used in this assignment is the Australian Guide to Legal Citation (AGLC) 3rd Edition referencing method. Additional information regarding this method is available through the li
ary and the Academic Learning Centre. When making a reference, cite the original source or authority in preference to a secondary source such as the textbook, especially when you are discussing various sections of legislation. This means you should make reference to legislation, 1cases and Tax Rulings as a priority to back up any arguments that you make in your assignment.
Week 8 Wednesday (2-May XXXXXXXXXX:45 PM AEST
Week 10 Friday (18-May-2018)
Students must complete all Parts of the Assignment.
To support the analysis in your answers refer where appropriate to the ITAA 1936, ITAA 1997, Tax Rulings and/or case law.
Question 1: 10 marks, 10% of the subject. Each sub-question is worth 2 marks .Use complete sentences.
Advise your client on how the following items, receipts or expenses, will be treated for tax purposes under Australian tax law:
1. A landlord owns a flat he leases to tenants. A new tenant pays the landlord before the start of the lease a lump sum of $15,000 as part of the lease negotiations.
2. Cheryl owned a warehouse destroyed by a fire. Her insurance company paid her compensation of $500,000 for the loss.
3. During the tax year XXXXXXXXXXBoris paid his tax agent $500 for the lodgement of his XXXXXXXXXXindividual income tax return and $800 for the preparation and lodgement of the objection to the XXXXXXXXXXassessment.
4. James works at a hospital and when he is at work he buys his lunch at the cafe in the hospital. Over the course of a year he spends $2,000.
5. Frances started a new business and at the launch of the business she hired a restaurant and invited over one hundred potential clients for the business. The cost of hiring the venue and providing food and drink was $5,000.
To support the analysis in your answers refer where appropriate to the ITAA 1936, ITAA 1997, Tax Rulings and/or case law.
Question 2: 10 marks, 10% of the subject. Use complete sentences.
Usman held a French passport at all relevant times. From 2012 until the end of the XXXXXXXXXXincome year he had an Australian visa which permitted him to live and work here.
During the time he was in Australia he worked as an engineer. For two months in 2015 he returned to France and worked there. At all times in the XXXXXXXXXXtax year he worked in Australia.
For the XXXXXXXXXXtax year is Usman a resident or non-resident?
To support the analysis in your answers refer where appropriate to the ITAA 1936, ITAA 1997, Tax Rulings and/or case law.
Question 3: 10 marks, 10% of the subject. Use complete sentences.
In April 2016 Norman, a hairdresser, bought his main residence in Melbourne for $700,000. Legal and stamp duty costs associated with the purchase were $70,000. The home had six rooms.
In April 2017 Norman spent $100,000 in making part of his home suitable for his hairdressing business. The business used two of the rooms and he started working f2rom home in May 2017.
Advise Norman of the capital gains tax implications of the above facts for the XXXXXXXXXXyear.
To support the analysis in your answers refer where appropriate to the ITAA 1936, ITAA 1997, Tax Rulings and/or case law.
Question 4: 10 marks, 10% of the subject. Use complete sentences.
In your work as an accountant you advise a client, Avon Pty. Ltd. (Avon), on various matters. Avon entered into a $500,000 one year contract in June 2016 with Central Queensland University (a registered Research Service Provider) to undertake research and development for Avon. The contract was to run from July 2016 to June 2017. Avon wants your advice about tax offsets and how this expense could be treated by the ATO in the XXXXXXXXXXtax year.
Please advise.
To support the analysis in your answers refer where appropriate to the ITAA 1936, ITAA 1997, Tax Rulings and/or case law.
Assessment criteria Evaluation Criteria
These criteria are a general guide as to the standard expected at the various levels. Characteristics indicative of the respective levels of achievement in the assignment are as follows. It is not necessarily the case that all these criteria will be met at a particular standard as there may be a superior performance on one of the criteria and not so satisfactory performance on another.
High distinction standard
· The answer is very well written and clearly expressed
· There is a demonstrated appreciation and understanding of the issues involved
· The answer is well structured and logically organised
· Demonstrated mastery of referencing system
· There is evidence of a comprehensive analysis of the issues
· Conclusions are backed by well-reasoned arguments demonstrating a detailed insight and analysis of issues
· Comprehensive coverage of all relevant issues
· References are made to the appropriated legislation for particular issues
· Statutory provisions are analysed and interpreted co
ectly
· The legislation is applied to the particular fact situation in a competent manner
· Consideration is given to the operation of the common law
· There may be consideration of issues not raised in the tutorials and answer guides
3
Distinction standard
· The answer is well written and expressed
· The answer is structured and logical
· The issues have been reasonably well identified and appreciated
· There is co
ect use of referencing
· Issues have been analysed
· Reference is made to all appropriate legislation, although the analysis and interpretation is not as detailed and reasoned as for the high distinction standard
· The effect of the common law is considered
· There is a comprehensive coverage of the issues
· Occasional e
ors of law and legal reasoning may still be present
Credit standard
· The answer is generally well written and expressed
· The answer is structured and sequential
· Referencing is satisfactory
· Issues are identified and addressed
· There has been an attempt to analyse some of the issues
· The coverage of issues is reasonably comprehensive often with a good
treatment and analysis of particular points
· E
ors of law and inco
ect reasoning may sometimes be present
· Statutory interpretation may require improvement
· Depth of treatment is often lacking in some of the issues
· Pass standard
· The answer is able to be followed and understood
· The answer could perhaps be better organised and structured
· The referencing may need improvement
· Issues may need to be identified and addressed in more depth
· Analysis when present may be inco
ect
· Some familiarity with the legislation and its application is demonstrated
· Sometimes the conclusions reached are simple
· There may be several e
ors of law
· There may be quantities of material of marginal relevance included in the
answer
4
Fail standard
· The answer may be significantly short of the required length
· The written expression is poor and difficult to understand
· The answer is poorly organised
· There has been a failure to identify and address the issues in the question
· Referencing is generally inadequate
· There is a lack of familiarity with the legislation and its appropriate application
· The reasoning and application demonstrated is poor
· Frequently there is much i
elevant material
MARKING
All parts of the assignment will be marked in accordance with the university’s Grades procedure (which can be accessed via the Course Profile). The following marking ru
ic incorporates that procedure.
5
MARKING RUBRIC GRADE MARK
HD 85%+
CRITERION
Demonstrates proficiency in all the learning outcomes of the unit; work is well read or scholarly.
COMMENT: Here, the student will have done everything well and formulated their answer in a tight, efficient, thoroughly professional manner. Their explanations and arguments will have a strong logical flow and be convincing. Their research will be thorough. Demonstrates awareness and understanding of deeper and less obvious aspects of the unit, such as ability to identify and debate critical issues or problems, ability to solve non‐routine problems, ability to adapt and apply ideas to new situations. COMMENT: The student will demonstrate this by achieving all the outcomes for a Credit, but also some of the higher level standards for a High Distinction. Demonstrates ability to use and apply fundamental concepts and skills of the unit, going beyond mere replication of content knowledge or skill to show understanding of key ideas, awareness of their relevance and some use of analytical skills.
COMMENT: Learning involves not only knowing principles or concepts but also the ability to apply them to
Answered Same Day Apr 19, 2020

Solution

Pulkit answered on Apr 26 2020
150 Votes
Question 1
Part 1
Issue: In the given case the landlord receives a lump sum amount of $15000 as a part of lease negotiation from the new tenant.
Rule: In accordance with IT 2594, every individual should show the amount of rental income or any other payment in nature of rent received as taxable income and liable to pay tax. The lessor if receives any amount in advance because of lease agreement is liable for assessing the amount as taxable. This means the amount will be included in the income of the year of receipt, no matter whichever form of accounting followed. The payment received is to be taxed in the year of receipt as the landlord is free to use the funds. The landlord is also liable to show the rental incomes for the year.
Analysis: In the light of the above rule in the given case the landlord has received a lump sum amount which is a part of the lease. The amount is received as a part of lease negotiation. Hence it is received in advance because of lease. The landlord is free to use the amount received. Hence the landlord is liable to pay tax.
Conclusion: As per the above discussion it can be said the landlord is liable to pay tax on $ 15000 in the year of receipt itself though amount not yet due.
Part 2
Issue: In the given case Cheryl is the owner of the warehouse which is destroyed by fire. She receives an amount of $500000 as compensation for loss by fire from the insurance company.
Rule: As per section 8-1 of the ITAA 1997 the amount of compensation is received for permanent damage or destruction of the asset. Compensation is defined as the amount received by the taxpayer an amount in the form of compensation resulting from loss incu
ed. There is no disposable of the asset at the time of receipt of the compensation then the same would represent as recoupment of the acquisition cost of the asset. And the amount of compensation will be deducted from the cost of the asset. No capital gain tax arises until the point when the asset is disposed of by the taxpayer. Even if the compensation amount exceeds the cost no capital gains tax.
Analysis: In the light of the above provisions in relation to compensation received in the given case Cheryl has received the amount of compensation from the insurance company for a warehouse which is destroyed by fire. Cheryl has not disposed of the warehouse and hence he is not liable to capital gain tax.
Conclusion: As per the above discussion it can be said that in the given case the amount of $500000 will be deducted from the cost of acquisition of the warehouse. Cheryl will not be liable for any capital gain tax.
Part 3
Issue: In the given case Boris paid $500 to the tax agent for preparation and lodgement of income tax return of 2015-16 and he also paid $800 for lodgement of objection to 2015-16 assessment.
Rule: As per D10 cost of managing tax affairs 2017 amount of fees paid to the tax agent for preparation and lodgement of income tax return is allowed to be deducted from the taxable income i.e. allowable deduction. It includes the amount paid for purchasing material of tax reference, for obtaining tax advice, lodging tax return through tax agent and also dealing with the department for taxation matters. The amount is allowed as deduction in the year of payment.
Analysis: By analysing the given case Boris has paid to tax agent in 2016-17 for lodging tax return of 2015-16 and also has paid to tax agent for preparing and lodging objection for assessment of 2015-16. He is liable for deduction in 2016-17 as allowable deduction in the year of payment. The amount paid for objection of assessment of 2015-16 comes under the dealings with the department.
Conclusion: Hence Boris is allowed deduction of $500 and also $800 from his taxable income.
Part 4
Issue: In the given case James incur expense of $ 2000 annually on taking lunch in the café in the hospital where he works.
Rule: As per Ronpibon Tin’s case, Amalgamated Zinc (de Bavay's) Ltd v FCT (1935) 54 CLR 295 and W Neville & Co Ltd v FCT (1937) 56 CLR 290 to claim a deduction of an amount incu
ed during working:
· one must actually incu
ed the expense himself i.e he must have spent the money himself and have not received the same from other.
· The expense must have been incu
ed for the purpose of earning income.
· one must have a records in the form of receipts to prove it.
Also only overtime meal allowance is allowable expense that too up to the amount actually spent is allowed for deduction. Only meal allowance if received is allowable expense. For claiming any expense as deduction it need to be incu
ed in relation to the work done, it should not be...
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