Tax

AssessableDetermining the income and expenses that are assessable income or allowable deductions Assessable Particulars Legislation, Case law, Rulings, Reasoning Item – 2020 Tax Return No Wedding Gift A gain that is classified as a normal gift cannot be classified as earnings. In “Hayes v FCT (1956)” the bookkeeper got shares in company that was given to h...

Introduction to the case studyIssue: This is a case of an employee named as Alan who used to work with a company named as ABC Pty Ltd. This case study would help us to know about the provisions relating to fringe benefit tax in Australia. There are various benefits which are given to Alan by the company on which fringe benefit tax needs to be charged. Apart from this if any transaction includes GST then input tax credit is also available in th...

IssueIssue The main issue in the given case is to determine whether Kit is an Australian tax resident for the given income year and to comment on the relevant tax treatment on the received income during the tax year. Rule In order to compute the tax treatment on the derived income of an individual, it is essential to determine the tax residency status of that concerned individual. It is because, if the individual is Australian tax resident ...

Answer to Question 1“Section 4-15 of the Income Tax Assessment Act 1997” states that in order to calculate taxable income, the allowable expenses are deducted from assessable income. In addition, a taxpayer is allowed in claiming deduction under “Section 8-1(1) of the ITAA 1997” for expenditures incurred on gaining or developing assessable income along with conducting the activities associated with the businesses...

Tax Evasion and Tax AvoidanceTaxation system is primarily complex as it aims to ensure transparency and fairness in entire system. Despite of tax policies for each transaction will certain meaning various people abuse taxation provisions in order to save tax whether it is morally or immorally. By considering various cases of tax abuse of years, G8 leaders had announced new tax measures for UK Taxation system with the objective to clamp down in...

LawsIncome tax assessment Act 1997 is one of the main statues for calculating income tax and an act of Australian parliament. Under the provision of section 8-1 of the income tax assessment act, 1997, some of the general deductions are provided that are listed below: Any loss or outgoing can be deducted from assessable income to the extent that Loss is incurred in conducting business for the purpose of producing and gaining assessable inc...

The Cultural Analysis of Virginia Woolf's Short Story1.Virginia Woolf short story disagreement with certain cultural values Virginia Woolf was simply more than a mere women’s writer; she was an excellent observer of everyday life. The same explains why her short story in a way or another contradicts certain cultural values (Woolf, 2016). The world that Virginia Woolf analyses in her short story are recognizable to the context in which s...

Section 100-35 of the Income tax Assessment Act 1997 defines Capital Gain and Capital Loss1: The Division 100 of the Income tax Assessment Act 1997 provides a guide to the capital or losses. The section 100-35 of the Income tax Assessment Act 1997 provides that a capital gain is made if the amount received from the CGT event is more than the cost associated with that CGT event and if it is vice versa then it is capital loss. That mea...

Question 1: ResidencyThe central issue is to determine whether the taxpayer Harry is considered to be tax resident of Australia or not. Further, the objective is to comment on the source of income derived by Harry and the relevant tax treatment available on the amount of income received in America.  In order to determine the tax residency status of the taxpayer s. 6(1) of Income Tax Assessment Act, 1936 would be taken into account th...

Net Capital Gains or Losses CalculationThe main issue that is under consideration deals with the intention of discovering the capital gains and the losses that have been obtained from the asset sales that has been explained in “Section 108-20 of the ITAA 1997”. There are various laws that are associated with it and they are given below: “Section 108-20 of the ITAA 1997” “Section 108-10 of the ITAA1997&rdqu...

Rules and Laws for s 8-1 of ITAA 1997 in the Case of Big Bank LtdThe problem and the challenge that has been explained with respect to this case study tries to handle the cost of transporting the machine and obtaining allowable deductions in income tax. There are numerous rules and laws that can be applicable with respect to the case study and each of them are explained as follows:   Rules:  “Section 8-1 of ITAA 1997”...

Overview of the Case StudyWith the help of the given case study one would understand the taxability of income for musicians. There are several cases held regarding the taxability of income for musicians, since there was no separate law for them.  Hence in early 1980s Australia Taxation office had introduced certain provisions regarding the income for musicians. The provisions directly points out the income needs to be taxed and the income...

Normal ConditionRosemary had bought a vacant land, worth $50,000, on 20th October 1997 and build a house on that land on 20th May, 1999. She intends to sell the property for $300000 on 1st June,2017. She likes to know the tax consequences for selling the property. The report is prepared to provide advice to Rosemary on the capital gain tax consequences under the said scenario and, also, for some alternative situation. Tax Cons...

IssueWhether a valid contract was formed in this case, or not? Whether the exclusion contract was valid, or not? To fulfill a promise, two or more parties come together and form an agreement, whereby for fulfilling the stated promise, consideration is paid. When such an agreement contains some specified elements, it becomes a contract (Clarke & Clarke, 2016). When the promise, i.e., the conditions or stipulations of the contract, are co...

Analysis of the CasesIn the current trilogy of cases relating to timing namely “Canderal Ltd v Canada”, “Toronto College Park v Canada” and “Ikea Ltd v Canada” the Canadian supreme court laid down the principles which administers the time of identification of receipts and time of deducting the income expenditure. In “Ikea Ltd v Canada”, the court conversed whether the payments rela...

Residency Status of AmityAs per the definition given under “section 995-1 of the ITAA 1997” occupant or Australian dweller denotes individual that has their home in Australia, except for the tax officer is satisfied that the individual has their eternal place of house out of Australia (Woellner et al., 2016). “Section 6(1), ITAA 1936” explains that an individual is said to be an Australian resident if the pers...

Criteria for Tax Residency under ss. 6-1 ITAA 1936 and TR 98/17The individual tax residency is dealt with as per ss. 6-1 ITAA 1936. This subsection highlights the various statutory tests available to ascertain the tax residency status besides the general residency test. These tests have been discussed in detail in the tax ruling TR98/17. The tax residency becomes pivotal owing to the differential tax treatment that is applicable for Australian...

FBT ConsequencesFBT consequences will be imposed on employer and not on the employee when the employer has issued fringe benefits to employee. The potential taxation consequences are specified in “Fringe Benefits Tax Assessment Act 1986 or FBTAA 1986.” Further, the noticeable factor in this regards is that employer who provides benefits to employee but restrict the utilization of the benefits for personal usages would have FBT liab...

Facts About Jill and Her TransactionsThe issues involve: (1) whether the taxpayer be held assessable under the “section 6-5 of the ITAA 1997”; and (2) whether the taxpayer be entitled to claim the allowable deductions under “section 8-1 of the ITAA 1997”. As per “section 6, ITAA 1936” income from the personal exertion or income obtained from the personal exertion implies income comprising of the wage...

Issue 1: Income from personal exertion1). Issues: The issue is related to the ascertainment of the income that is obtained from the media publications under “section 6-5 of the ITAA 1997”? Rule: Referring to the definition provided under “section 6-5 of the ITAA 1997” states that income from personal exertion refers to the income that an individual taxpayer earns from their personal efforts (Jones and Rhoades-...

ITAA 1936 and ITAA 1997: Determining Net Income of PartnershipThe main issues that the current case study is concerned relates to the determination of the net income of the partnership within the meaning of “section 90, ITAA 1936”. An explanation has been made under the “division 4 of the ITAA 1936”, which clarifies that the partnership is not treated as the separate legal entity under the meaning of general law and no...

As stated in the “section 108-5 of the ITAA 1997” capital assets is usually referred as the form of property or any kind of the legal equitable rights which is not treated as the property.As stated in the “section 108-5 of the ITAA 1997” capital assets is usually referred as the form of property or any kind of the legal equitable rights which is not treated as the property. As stated under the “section 108-5 of th...

Assessable Income and ExemptionsAn individual’s assessable income is subjected to income tax since it is added into the taxable income. Income according to the ordinary concepts is taxable under “section 6-5 ITAA 1997”. The court in “Scott v CT (1935)” held that income should be interpreted in terms of the ordinary concepts of mankind. Gains originating from business is an ordinary income under “section...

Case Study on Private Exertion Income For an ordinary income to for the part of the taxpayer’s assessable income during the particular year under “section 6-5 of the ITAA 1997” it should be derived must be derived by the taxpayer in the relevant year (Clarke, 2017). In order to consider the receipts as personal exertion it must be produced from the employment or services rendered there must be a sufficient connection ...