1. Demonstrate an understanding of the Australian income tax system, the concepts of income and deductions, CGT, FBT, GST general anti-avoidance provisions and income tax administration
This paper primarily deals with the core concept of taxation theory, practice and law. In it you are supposed to make a report that inculcates two questions based on different scenarios. Moreover, you have to significantly cover the following aspects in detail.
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The concept of Australian income tax system, income and deductions.
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The concept of CGT, FBT, GST general anti-avoidance provisions and income tax administration.
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Critical analysis of taxation issues.
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Evaluation of the taxation legislation and case law.
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Application of taxation principles to real-life problems.
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Identification of factual data regarding The City Sky Co goods and services tax (GST).
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Identification of the capital gain tax (CGT) consequences of Emma’s transactions.
Instructions
Unit Code HI6028
Unit Title Taxation Theory, Practice & Law
Students are required to follow the instructions by your lecturer to confirm any relevant information. You also need to follow any relevant announcement on Blackboard to confirm the due date and time of the assignment. The individual assignment will assess students on the following learning outcomes:
1. Demonstrate an understanding of the Australian income tax system, the concepts of income and deductions, CGT, FBT, GST general anti-avoidance provisions and income tax administration. (ULO 1).
2. Identify and critically analyse taxation issues. (ULO 2).
3. Interpret the relevant taxation legislations and case law. (ULO 3).
4. Apply taxation principles to real life problems. (ULO 4).
Question 1: The goods and services tax (GST)
- Identification of material facts regarding The City Sky Co goods and services tax (GST) consequences discussed in the assignment question
- Identification and analysis of legal issues / legal question and relevant laxation law
- Thorough yet succinct application of tax law to material facts.
- Detailed and accurate conclusions are reached from the discussion
- Correct information and taxation law have been used and properly cited. A detailed analysis has been performed.
- Shows excellent understanding of the cases and/or section of legislation, its context and application of taxation law.
Question 2: Capital gains tax (CGT)
- Identification of material facts regarding the capital gain tax (CGT) consequences of Emma’s transactions discussed in the assignment question.
- Identification and analysis of legal issues / legal question and relevant laxation law.
- Thorough yet succinct application of tax law to material facts
- Detailed and accurate conclusions are reached from the discussion.
- Correct information and taxation law have been used and properly cited. A detailed analysis has been performed
Assignments’ Instructions and Requirements
QUESTION 1- (10 MARKS)
The City Sky Co is a property investment and development company. Recently the company purchased a vacant piece of land south of Brisbane on which it is planning to build 15 apartments to sell. The City Sky Co has engaged the services of the local lawyer, Maurice Blackburn, to provide the legal services required for the development for $33,000. Maurice Blackburn runs an established sole trader business and turns over revenue of $300,000 per year. Advise The City Sky Co of the input tax credit entitlements that they may be entitled to. Assume that The City Sky Co is registered for GST purposes.
QUESTION 2 - (10 MARKS)
Emma has provided to you a listing of the transactions she has undertaken throughout the financial year to assist you in completing her 2015 income tax return. Sale of a block of land for $1,000,000: Emma purchased the land as an investment in 1991. The purchase price was $250,000, plus $5,000 in stamp duty, $10,000 in legal fees. To fund the purchase, she took out a loan on which she paid interest totalling $32,000. During the period of ownership her council rates, water rates and insurance totalled $22,000. In January 2005 a dispute occurred with a neighbour over the use of the land and legal fees incurred amounted to $5,000 in resolving this dispute. Before putting the property on the market $27,500 was spent to remove a number of large dangerous pine trees that were on the land. Advertising, legal fees and agent’s fees on the sale of the land were $25,000. Sale of Emma’s 1000 shares in Rio Tinto for $50.85 per share: Emma paid brokerage fee of 2% on the sale. Emma initially purchased the shares for $3.5 per share in 1982. Sale of a stamp collection Emma had purchased, from a private collector, in January 2015 for $60,000: Emma sold the collection at auction for $50,000. Auction fees totalled $5,000 for the sale. Sale of a grand piano for $30,000: It was initially bought for $80,000 in 2000.
Advise Emma of the capital gain tax (CGT) consequences of her transitions. Ignore indexation. Your answer must include references to relevant tax law and or cases.
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