T2 2017 Individual AssignmentDue date: Week 10Maximum marks: 20 (20%)Instructions: This assignment...

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T2 2017 Individual AssignmentDue date: Week 10Maximum marks: 20 (20%)Instructions: This assignment is to be submitted by the due date in soft-copy only (Safe assign – Blackboard).The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook.It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your submission that it is appropriately acknowledged.Question 1Discuss whether the following are allowable as deductions under s 8-1 of ITAA 1997.  	The cost of moving machinery to a new site 	The cost of revaluing assets to effect insurance cover 
	
Document Preview: HI3042 Taxation LawT2 2017 Individual Assignment Due date: Week 10        XXXXXXXXXXMaximum marks: 20 (20%)Instructions:  This assignment is to be submitted by the due date in soft-copy only (Safe assign – Blackboard). The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook.It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your submission that it is appropriately acknowledged.Question 1 Discuss whether the following are allowable as deductions under s 8-1 of ITAA 1997.The cost of moving machinery to a new siteThe cost of revaluing assets to effect insurance coverLegal Expenses incurred by a company opposing a petition for winding upLegal Expenses incurred for services of a solicitor in respect of a number of matters, including conveyancing, discharge of a mortgage, and general legal advice relating to a client’s business operations. (The Solicitor account does not separate the costs for various matters.)Question 2 Big Bank Ltd operates nationally with more than 50 branches, a 10-storey head office and numerous call centres. It is registered for GST purposes. Big Bank has for many years provided loans and deposit facilities to customers in Australia. Last year it launched a new product, Big Bank home and contents insurance policies. It was a significant step for Big Bank and required it to change some of its computerised accounting systems due to the fact that GST needed to be charged on the new product.Big Bank budgeted to spend $1,650,000 (including GST) on advertising campaigns last year. Of that sum, $550,000 was allocated to a television advertising campaign specifically promoting Big Bank home and contents insurance policies. The other $1,100,000 was allocated to a general advertising campaign, including television, radio and...

David · Accepted Answer

Answer 1. 
1. Not an allowable deduction under s 8-1 of ITAA 1997 since this is a Capital nature 
expenditure. 
2. Will be allowed as a deduction under s 8-1 of ITAA 1997 since the nature of recurring 
and not capital. 
3. The company would not be allowed to deduct this expense under s 8-1 of ITAA 1997 
since this can adversely affect the profit earning capacity of the company. 
4. The nature of expenditure would matter. If the nature is revenue it can be allowed as 
deduction, in case it is not it will not be allowed.
Answer 2. 
The company would be eligible to claim credits on the GST paid since the company has obtained 
these services for the purpose of business and is liable to pay the amount. Further, the price 
charged includes GST and reflected on the tax invoice. 
Therefore Big Bank can claim GST credits on the advertisement expense of $1650000.
Answer 3. 
Calculation of Tax Offset 
  Tax payable on his taxable income (in totality) TAX 
57,000 (68000 -11000)  $        10,072.00  
Tax Rate for Income $37,001 – $87,000:  $3,572 plus 32.5c for each $1 
over $37,

T2 2017 Individual Assignment Due date: Week 10 Maximum marks: 20 (20%) Instructions: This assignment is to be submitted by the due date in soft-copy only (Safe assign – Blackboard). The assignment is...

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