LAW 511 TAXATION LAW
ASSIGNMENT 1 – WRITTEN ASSIGNMENT
VALUE: 30% OR 30 MARKS
WORD COUNT: 1,500 – 2,500. THIS INCLUDES ALL FOOTNOTES AND
REFERENCES. (10% margin under or over)
This assignment may be submitted on or before 11.59pm (ACST), Study Week 8
2nd May 2021
? Submit your Assignment using Word or PDF file format
? The assignment must be lodged online via Learnline Assignment Lodgement link.
? Assignment lodgements will be acknowledged automatically on the Learnline site, on submission.
? Citations: The CDU Harvard or AGLC referencing styles may be used, as long as you choose one style and use it consistently.
? Additional research IS required for this assignment.
? Further questions: Post your questions on the discussion board.
College of Business and Law
UNIVERSITY PLAGIARISM POLICY
Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material. All sources of information and ideas used in assignments must be referenced. This applies whether the information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a friend.
Plagiarism policy is available at:http://www.cdu.edu.au/governance/doclibrary/pol-001.pdf and
Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/doclibrary/pro-092.pdf.
EXTENSIONS AND LATE LODGEMENTS
Extensions
An Application for Assignment Extension or Special Consideration should be completed and provided to the Dean, College of Business and Law.
This application form, explanation and instructions is available on the Learnline course site or direct from http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx
Please note that it is now College policy that all extension requests must be approved by the Dean. The lecturer is not able to personally approve extension requests.
Leaving a request for an extension, special assessment or special consideration until the last moment, based on grounds that students could have reasonably been able to foresee, may result in the application being rejected.
Late lodgement
Late lodgements are subject to a penalty of 5% of assignment marks per day. Partially completed assignments will be accepted with appropriate loss of marks for the incomplete portion.
Case Study One –
Part A
You are currently working as a graduate accountant and are provided with the following information from a client. The client, Susan, has the following income and expenses for the financial year ended 30 June 2020. Susan is employed as a financial planner for a local financial planning company. In addition to her employment Susan also operates a food store at the local markets on the weekend. Income
35,000.00 Sales of food, at the market stall
1,000.00 A wedding gift from her employer
25,000.00 Bonus received from her employer for successful completion of a large project
145,000.00 Salary received from her employer (including PAYG Withholding of $22,000)
3,000.00 Interest on Bank Deposits
10,000.00 Susan wins $10,000 at the casino
25,000.00 Sale of some personal jewellery (she brought the jewellery for $450)
45,000.00 Sale of shares (she brought the shares 13 months ago for $10,000)
2,000.00 Exempt income from foreign services provided with respect to Army Reserves
1,000.00 Received Financial planner of the year award from the Institute of Managers. To receive the award Susan had to nominate herself and it was based on her client portfolio’s performance during the year.
Expenses
2,000.00 Rent on market stall for her business
5,000.00 Purchase of food stall, Susan estimates in cost she has $2,000 in food as at 30 June 2020 (as stock on hand) and advises that as at 1 July 2019 she had food as stock on hand at cost $3,000
800.00 Susan purchased work boots for $250, protective sunglasses for $250 and New dress for $300 (which he also wears on the weekend)
1,250.00 Bookkeeping fees for the market stall business
2,000.00 Purchase of new equipment for the market stall business
400.00 Cost of meals and entertainment that her employer reimbursed her for
200.00 Taxi fares for travel to and from work when her car was being serviced
730.00 Membership fees, $530 relating to membership of financial planners’ association and $200 relating to membership fee for real estate institute
3,200.00 Rates on family home
900.00 Electricity for family home
500 Advertising packaging for market stall business
Susan has two children and her spouse passed away two years ago. Susan does have private health insurance. Susan advises you that she had carried forward tax losses from last year of $2,000 relating to her market stall. In addition to the above Susan advises she does work from home as she attends to emails late night after dinner at least 4 nights a week, however she works from kitchen table as she does not have a separate office at home.
Required:
• Determine which Income and Expenses are assessable income or allowable deductions.
Note you will need to cite legislative references, case law and tax rulings as applicable. Emphasis is on providing substantiation for you reasoning to include as assessable income or allowable deduction. Also refer to the relevant item number on the 2020 tax return where the amount would be disclosed, i.e. (interest income is item 10). An Example format is provided below.
• Assume Susan is a resident for Australian taxation purposes, calculate her tax liability including any tax offsets and levies.
EXAMPLE FORMAT
Income
Assessable Particulars Legislation, Case law, Rulings, Reasoning Item – 2020 Tax Return
Y/N
Expenses
Deductible Particulars Legislation, Case law, Rulings, Reasoning Item – 2020 Tax Return
Y/N
Part B
During your meeting with Susan, she advises that her employer has offered her a position for 3 years in Thailand. She seeks your advice on residence issues for Australian taxations purposes. In particular she wants to understand the elements of the Domicile test and whether she can be seen as a non-resident for Australian tax purposes while she is in Thailand. Be sure to discuss Harding v FCT [2019] FCAFC 29.
(Part A 20 marks)
(Part B 5 marks)
Word Count: 1,000 – 2000 words
Theory Question Required:
Discuss the difference between Tax law approach to determining taxable income and accounting principles in determining net profit in the Income Statement. Give examples and refer to accounting standards where necessary.
(5 marks)
Word Count: 500 words
