...Assessment 1 ACCT20023 - Australian Taxation Law Term 3, 2013 Contents PART A. 3 PART B. 6 1. Gross Salary – Banyule City Council 6 2. Reportable Fringe Benefits [Motor Vehicle] – Banyule City Council 7 3. Motor Vehicle Allowance – Banyule City Council 7 4. Gift of expensive wine from ratepayer of Banyule City Council in appreciation for solving a planning permit issue 7 5. Gift of a golf club from a tax client as a birthday present 7 6. Net proceeds from business – Tax advice given to private clients 7 7. Hobby earnings from garage sales at his home 8 8. Sale of household goods on the internet 8 9. Gross Capital Gains from selling a jewellery piece 8 10. Gross Capital Proceeds from sale of shares in Eastfarmers Ltd 9 11. Net Dividend BHX Ltd – non-resident company 9 12. Winnings at Casino 10 13. Dominic’s gross service pay in the Army Reserve (PAYGW $1,000) 10 14. Fully franked dividends- XLY Pty Ltd – resident company 10 15. Unfranked Dividends- Excel Mining NL 10 16. Partially franked Dividends – 50% franked- Rio Ltd 10 17. Maintenance payments made by Dominic relating to a previous marriage 10 18. Medical expenses paid by Dominic 10 19. Gift to Royal Children’s Hospital 11 20. Brief Case for work related purposes – receipt kept 11 21. Payment of interest charged by Taxation Office on unpaid tax in 2012 11 22. Self-Education expense: 11 23. Superannuation paid to AMP Superannuation Ltd 11 24. Life insurance policy 12 25. Personal accident...
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...1a The issue is whether the $1 million sales of property is capital, or it is a “flow” from John’s business. According to US judgement of Eisner v Macomber, the concept of “flow”, as the income that “flows” from capital should be treated as ordinary income. Therefore, whether there is a “flow” or not would be the most critical judgement to make. In John’s case, he bought the motel for $300,000 and costed another $50,000 to demolish the building; in the end he sold the property for $1,000,000, so he has gained $650,000. According to the judge decision of Hochstrasser v Mayes [1960] AC 376, in order to determine ordinary income, this earned income must be a real gain. John has gain $650,000 from the activity. Therefore, cash and genuine gain have been determined. John was supposed to purchase this motel site for build a new kindergarten because he believed that Town Council had plan to do it. So he can do it before Council then expect to sell it back to Council for a higher price. Therefore, what John was doing could be indicated as a business. He ended up discovered the land have natural underground hot water and sold it to a green energy company for $1,000,000 with $650,000 genuine gain. Therefore, this $650,000 of income is likely to be a ordinary income. However, it could be argued that the property would be regarded as capital. For the reason that John’s income is not a regular payment and it is not severable from its earning source, because the source is the capital...
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...Issues Are the repairs made to the electricity poles on Mc Donald’s farm tax deductable? Is it a case of merely a repair or its nature is of restoration or replacement? What are his tax implications on insurance claims Mc Donald received from damage to electricity poles by natural disaster? What are his tax implications on Mc Donald for resurfing the road (owned by neighbour Peppa) to access his farm? Law 1.) Assessable income consists of ordinary income and statutory income as per Income Tax Assessment Act 1997(ITAA97) section 6-1 (1). Section 6-5 of the Income Tax Assessment Act 1997 states that ordinary income is income according to ordinary concepts derived directly or indirectly from all sources whether in or out of Australia. Ordinary income is not defined in statute law; it is determined through case law and can be divided into four categories; income from personal exertion, income from business, income from profit-making schemes & income from property (Barkoczy, 2013, p. 266 - 267). A taxpayer’s accessible income includes not only amounts that are ordinary income but also amounts to that are statutory income (s6-10(1) ITAA97). Statutory income comprises amounts that are deemed by the legislation to the accessible income, But which are not otherwise necessarily income according to ordinary concepts. 2.) Taxpayers subtract deductions from their assessable income to arrive at their taxable income for the financial year. There are two types of deductions...
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...Taxation Assessment Mary Brown, 52, is an advertising executive who had worked with Johnson& Brown Ltd for 10 years. On 1 October 2011 she was made redundant as part of a company re organisation. Listed below are facts that will be considered for tax purposes, each will be examined to determine what her taxable income is. • She received her annual leave payout of $ 14 500 Mary’s annual leave payout of $14,500 is assessable income under s83-A and 83-B. However, as her payout is due to redundancy, under subdivision 83-15 it will be taxed at her marginal rate, but no more than 30%. • Termination payment of $ 100 000. Mary Brown was dismissed from her job because her position has been made redundant in a company restructure. She is under 65, was not given a new title within the organisation and her redundancy was made in good faith. These factors satisfy the conditions of redundancy subdivision s83-175 in Taxation Law. Therefore, as part of her redundancy, of the $100,000 termination payment there is a tax free amount of $50,615 (base amount of $8,435 and a service amount of $4,218 for every consecutive full year of employment). This results in a taxable component of $49,385 (figures based on 2011-12 tax rates). • Her superannuation entitlement was $ 250 000 of which $ 25 000 represented her non-deducted contributions. The superannuation specified has been contributed by the employer and is not deductible or tax purposes. After taking 3 months off work Mary decided...
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...was acquired on 1 June 2009, so indexation method does not apply here (Div114). However because the Party Time is a company, it cannot use the discount method (Div115). So net capital gain in current year is $2350000-$762000=$1588000. (5) Offset $60000 capital loss carried forward from previous year, therefore the net capital gain is $1588000-$60000=$1528000, this amount will be included in assessable income for the year ended 30 June 2014. b) The correct balance should be $105000. Although the $25000 trading stock is yet to be delivered and not actually owned by Party Time, your company hold the bill of landing which means that you has the power to dispose of this part of trading stock so the trading stock is on hand of Party Time (Taxation Ruling IT 2670). So the $25000 trading stock should be included in the balance of stock on hand. In the case of FC of T v Suttons Motors Wholesale Pty Ltd 1985, the High Court considered if the entity has the power to dispose of the goods, the...
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...The issue in this case is to assess Phillip’s taxable income for the year ended 30 June 2010. According to section 4-15 Income Tax Assessment Act 1997 (ITAA 1997), taxable income equals assessable income (Division 6) minus deductions (Division 8). Assessable Income In order to determine the assessable income, Division 6 of ITAA 1997 would be the relevant legislation and in particular Section 6-1(1) refers assessable income consists of ordinary income and statutory income. - Rental Income Section 6-5(1) defines “assessable income” to include income according to ordinary concepts. In the case of Adelaide Fruit & Produce Exchange Ltd, ordinary income is characterized as exhibiting recurrence and regularity. For Phillip’s case, rent falls under income from property as it exploit the property and considered to be income producing. Whereas Adelaide’s ruling for periodic and regular payment is satisfied by which a tenant contracts to pay the landlord, Phillip, for the use of premises. Hence, rent income of $55 000 is assessable under Section 6-5 ITAA 1997. However, $5 000 rent received on 5 July 2010 is not included since the case is only calculating for year ended 30 June 2010. - Manufacturing of tennis racquets business Section 6-5 ITAA 1997 defines “business” as sustained and regular transactions and transactions done in the course of carrying on a business. This is satisfied by the manufacturing of tennis racquets where it regularly manufacture and...
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...National Law Institute University Tata Consultancy Services Vs. State of Andhra Pradesh AIR 2005 SC 371 Submitted to: Submitted by: Dr. Sanjay Kumar Yadav Ankit Premchandani Associate Professor 2010 B.A. LL.B. 40 Contents Facts 3 Legal History 3 Issue 4 Relevant Statutory Provisions 4 Andhra Pradesh General Sales Tax Act, 1957 4 Appellant’s Contentions 4 Respondent’s Contentions 6 Opinion of the Court 7 Question as to Interpretation 10 Decision 11 Comment 11 Facts * That Tata Consultancy Services (herein after the Appellants) provided consultancy services including Computer Consultancy Services. * Pre-manufactured software or Computer Software Packages off the shelf (canned software) is sold in the capacity of sub-licensees. (oracle, lotus etc.) * Further, as a part of the business, custom made software is also made and loaded on their customer’s computers. (hereinafter referred to as “uncanned software”) Legal History * In respect of the canned software the Commercial Tax Officer, Hyderabad, passed an order under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 [hereinafter called 'the Act'] holding that the software are goods. The Commercial Tax Officer accordingly levied sales tax on this software. * The Appellate Deputy Commissioner of Commercial Taxes also held that the software were goods and liable to tax. However, the matter...
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...CLAW3201 Case Analysis Introduction In Crown Insurance Services Ltd v Commissioner of Taxation (Crown), the issues raised are pertinent to the residence and source of the company under s6(1) of the Income Tax Assessment Act 1936. As cases are determined on the basis of all relevant facts and circumstances of each case, this analysis will focus on how the court’s decision process determined whether Crown had carried on business in the years 2004-2007 inclusive and the existence of central management and control (CM&C) in Australia. The purpose of this is to assess the valuation of Crown’s taxable income, which ultimately resulted in the objective decision to be set aside in favour of the applicant. Evaluation will be made in regards to how the case compares with previous cases and tax rulings and the likely impacts of the case on future commercial practices. Further, what the case infers about the current state of law in this area will also be discussed, as well as the potential degree of changes in modern judgements of residence and source issues within businesses not incorporated in Australia. Past judgements and tax rulings The facts of the case are similar to that of Malayan Shipping Co Ltd v FCT (1946), where the court held that “the mere trading in Australia by a company not incorporated in Australia will not of itself be sufficient to cause the company to become a resident”. This is true and consistent with the statutory definition of resident of Australia,...
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...Taxation for Business Decision Making (a) In this case, Colourvision is an Australian resident for taxation purposes and it received a capital gain generated from the sale of the land. This capital gain should be taxed under CGT. Rules for CGT 1. Capital gains from the realization of investment on assets that acquired on or after 20 September 1985 are caught by CGT. Relative law can be found in Part 3-1 (ss.100-1-121-35) and Part 3-3 (ss.122-1-152-430). 2. Section 102-5 contains the rule that net capital gains are included in the taxpayer’s assessable income. And section 102-15 contains the rule that net capital losses can be carried forward to offset future capital gains. 3. CGT is triggered by the happening of a CGT event. There are currently 54 kinds of CGT events (s.104 of ITAA1997) and each CGT event specifies the time of CGT event and how the capital gain is calculated. In this case, the sale of land in this case can be classified into CGT event A1, which is disposal of a CGT asset (s.104-10). The time of the CGT event A1 is when the taxpayer enter into the disposal contract (generally the date on the contract), not when the disposal asset is settled. If there is no disposal contract, CGT event occurs when the ownership changes. In this case, the time of disposal of the land is on 1 January 2014, when the sale contract was signed, instead of 1 April 2014 when the sale of the land was settled. 4. Div 108 ITAA97 contains the concept of a CGT asset...
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...Q1 The case concerns about disposal of a capital asset. The vacant land, which is acquired by Colourvision Pty Ltd at $12,000,000 on 1 January 1986, is sold for $3,000,000 on 1 January 2014. As the land is acquired after 20 September 1985, the old law cannot apply, capital gains need to be caught by CGT according to Part 3-19(ss. 100-1- 121-435) and Part 3-3(ss. 122-1- 152-430). As all the discussion can be only in the progress based on a “CGT event”(s 102-20 ITAA97), and “CGT event” are always related to “CGT asset”. It is necessary to identify if the land belongs to CGT asset. In the case, although the land was supposed to build into a new factory but actually not, it is obviously that the vacant 5-hectare block of land is a tangible CGT asset according to the definition in s 108-5(1), which is defined as “any kind of property”. Concerning the case, among three different kinds of CGT assets, this land belongs to “ordinary” CGT assets (Subdiv 108-A). As mentioned, only a CGT event is able to trigger capital gain and capital loss. 54 recognized CGT events(s 104 of ITAA 1997) are listed in a table. The Colourvision case is about the acquisition and disposal of a land, which is also a CGT asset, so it is in respect of Event A1, which describe disposal of a CGT asset(s 104-10) and Event D1, which specify in creating contractual or other rights(s 104-35). To be specific, the timing of acquisition, is when creating contractual or other rights, and in this case, it is 1 January...
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...Identify the internal and external context for risk management Introduction: in the October of 2015, MacVille has started a relationship with a small village that grows coffee beans called Papua New Guinea (PNG). The business will provide equipment and high-level skilled training to the village in exchange for cheaper roast beans. Internal context: MacVille is an Australian coffee supply business. It imports and supplies top quality coffee for cafes and restaurants. Their vision is “Within five years, MacVille intends to have established itself as the number one coffee supplier for fine coffee shops and restaurants in Australia.” The business has strategic directions to achieve its vision. MacVille also has Risk Management Policy and Procedure, which shows what to do to reduce level of risk, how to do it and who has responsibility. The business has Risk Management Process follows Risk Management Process Australia standard. External context: * Legislations: Macville follows legislation, standards and codes of practice as Work Health and Safety Act 2011(Qld), Australian Securities and Investments Commission Act 2001(Cwlth), Corporations Act 2001(Cwlth). PNG has developed a new OSH legislation, a new OSH framework, a new OHS structure that is economically driven. In April 2011, the Governments of Fiji and Papua New Guinea introduce a new program that was intended to improve the standards and practices on the workplace. * Economic environment in PNG: PNG’s economic...
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...Index Law of General Taxation regarding Imports and Exports 2 ARTICLE 1 2 Section I 2 Section II 2 Section III 3 Section IV 3 Section V 3 Section VI 4 Section VII 5 Section VIII 5 Section XIX 9 Section XX 9 Section XXI 10 Section XXII 10 ARTICLE 2. - 10 I. - General Rules. 10 II. - Complementary Rules. 12 Law of General Taxation regarding Imports and Exports ARTICLE 1: The General Taxes of Import and Exportation will be taken into account in accordance with the following: Tariff Section I LIVING ANIMALS AND PRODUCTS OF THE ANIMAL KINGDOM Chapter 01: Living Animals. Chapter 02: Meat and eatable residues. Chapter 03: Fish and crustaceans, mollusks and other aquatic invertebrates. Chapter 04: Milk and dairy products: bird eggs; natural honey; eatable products of animal origin, not expressed nor understood in another part. Chapter 05: Other not expressed animal products not understood in another part. Section II PRODUCTS OF THE VEGETABLE KINGDOM Chapter 06: Living plants and floriculture products. Chapter 07: Vegetables, plants, roots and nutritive tubers. Chapter 08: Fruits and eatable ones; rind of sour fruit-juices (citric), melons or watermelons. Chapter 09: Coffee, tea, grass and spices. Chapter 10: Cereals. Chapter 11: Products of the milling industry; malt; starch; inulin; wheat gluten. Chapter 12: Seeds and oily fruits; seeds and diverse fruits; industrial or medicinal plants; straw and forage. Chapter 13: Gums...
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...Taxation is said to be one of the key governance tools of any state including the upholding of Zambians sovereignty. INTRODUCTION The most fundamental function of taxation is raising revenue to pay for governmental expenses and programs. "Taxes are necessary to raise revenue for public goods and infrastructure, as well as to provide other sorts of public services conducive to general welfare and economic growth." Tax revenues pay for the necessary goods – like national defense or a legal system – that an unregulated market cannot provide by itself. More often overlooked is the role of taxation as a catalyst for the development of responsive and accountable government, and for the expansion of state capacity. Taxes, however, do more than simply raise revenue: "Any tax that produces revenue will in some way alter the social and economic order." Taxes that only raise revenue without effecting other changes do not exist in the real world. The concept of fiscal policy captures that link between revenue collection and government spending. More specifically, taxes can be used to increase or decrease inflation and purchasing power, stimulate investment, and prevent harmful concentrations of wealth. Taxation is an underrated tool in the effort to build more capable and responsive states. The role of taxation as a central force in the development of democracy resonates strongly in Anglo-American history. The duty of paying for government legitimizes demands for services...
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...Public Finance Methods in Nigeria The Federal Republic of Nigeria is comprised of 36 states located in West Africa geographically bound by the Republic of Niger to the north, the Gulf of Guinea (on the Atlantic Ocean) to the south, the Republic of Cameroon and Chad on the east and Republic of Benin on the west. Since gaining full independence from the British in 1960, Nigeria has gone from a Parliamentary system of government (modeled after the British Parliament), the Biafran Civil War, and numerous dictatorships to the current Democratic system of government. Widely described as the most populous country in Africa (accounting for over half of West Africa’s population alone[i]), the US State Department estimated in 2010 a population of approximately 152 million people of 250 Ethnic groups with the largest ethnic groups comprising of Hausa-Fulani (north), Igbo (south-east), Yoruba (south-west) and Kanuri (north). The religions practiced in Nigeria are Islam, Christianity and indigenous African traditional worship. The Hausa’s are from the northern part of the country and are predominantly Muslims, the Yoruba are from the south west and are predominately an even mix of Christians and Muslims, the Igbos are from the southeast and are predominately Christians. The official language of Nigeria is English in addition to other local dialects. Nigeria’s commercial capital (and former political capital), Lagos, is located in the southwestern part of the country while the political...
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...TAX COMPETENCIES, COMPLIANCE COSTS AND INCOME TAX COMPLIANCE AMONG SMEs IN UGANDA BY ANNET NAKIWALA 2007/HD10/11264U A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT S FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE IN ACCOUNTING AND FINANCE OF MAKERERE UNIVERSITY September, 2010 TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE DECLARATION I, Annet Nakiwala, declare that this dissertation is my own work and that it has never been presented for a degree award at any other university. Signature: ………………………………………… Date: ……………………………………………… ii TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE APPROVAL This is to certify that this dissertation has been submitted in partial fulfillment of the requirement for the award of a Masters of Science degree in Accounting and Finance of Makerere University with my approval as University Supervisor. Joseph Ntayi (PhD) Supervisor Signature: ………………… Date: ……………………… Arthur Sserwanga Supervisor Signature: ………………… Date: …………………….. iii TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE DEDICATION I dedicate this entire effort to my late Mother Gorreth Nabagereka. We miss you dearly. iv TAXCOMPETENCIES, COMPLIANCE COSTS & INCOME TAX COMPLIANCE ACKNOWLEDGEMENTS Completion of this research has been a result of both direct and indirect support of many people to whom I owe acknowledgement. I owe profound gratitude to my supervisors Dr. Joseph Ntayi and...
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