HA3042 Taxation LawT2 2018 Individual Assignment(2500 words)Due date: Week 10Maximum marks: 20...

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HA3042 Taxation LawT2 2018 Individual Assignment(2500 words)Due date: Week 10Maximum marks: 20 (20%)Instructions:This assignment is to be submitted by the due date in soft-copy only (Safeassign – Blackboard).The assignment is to be submitted in accordance with assessment policystated in the Subject Outline and Student Handbook.It is the responsibility of the student submitting the work to ensure thatthe work is in fact his/her own work. Ensure that when incorporating theworks of others into your submission that it is appropriatelyacknowledged.Question 1 (5 Marks)The Lotteries Commission conducts an instant lottery called ‘Set for Life’ under which a winner who scratches three ‘set for life’ panels wins $50,000 each year for 20 years. The first $50,000 is payable as soon as the winner is notified, and later amounts are payable on the first anniversary of the first payment. In the event of the death of the winner, the Commission may pay any outstanding amounts to the deceased’s estate.Requirement:Is the annual payment income? Give reasons for your decisionQuestion 2 (06 marks)Corner Pharmacy is a chemist shop. It provides no credit sales but accepts major credit cards. It sells items off the shelf and the proprietor fills prescriptions for cash and for payments made under the Pharmaceutical Benefits Scheme [PBS].Three (03) assistants are employed. The following financial data is provided:Cash sales --------------------------------------------$300,000Credit card sales-------------------------------------$150,000Credit card reimbursements -----------------------$160,000PBS:- Opening balance -----------------------------------$25,000- Closing balance ------------------------------------$30,000- Billings ----------------------------------------------$200,000- Receipts ---------------------------------------------$195,000Stock- Opening stock--------------------------------------$150,000- Purchases-------------------------------------------$500,000- Closing stock ---------------------------------------$200,000Salaries ------------------------------------------------$60,000Rent ----------------------------------------------------$50,000Requirement:On the assumptions that an accrual basis applies and the cost of sales and other outlays are allowable deductions for tax purposes, calculate the pharmacy’s taxable income.Question 3 (04 marks)What principle was established in IRC v Duke of Westminster [1936] AC 1? How relevant is that principle today in Australia?Question 4 (05 marks)Joseph (an accountant) and his wife Jane (a housewife) borrowed money to purchase a rental property as joint tenants. They entered into a written agreement which provided that Joseph is entitled to 20% of the profits from the property and Jane is entitled to 80% of the profits from the property. The agreement also provided that if the property generates a loss, Joseph is entitled to 100% of the loss. Last year a loss of $40,000 arose.Requirement:How is this loss allocated for tax purposes? If Joseph and Jane decide to sell the property, how would they be required to account for any capital gain or capital loss?

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Law and Taxation Policies	10
Topic- Law and Taxation Policies
Student’s Name-
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Table of Contents
QUESTION 1	2
QUESTION 2	4
QUESTION 3	6
QUESTION 4	7
References	9
QUESTION 1
Although lottery system is not legal according to the Government plocies but most of the companies take licence from Government so as to provide fun and entertainment to the public. This case is about the gambling tax that has been imposed on the company that uses lottery system to earn profits from their customers. The Lottery Commission has decided to create an interesting lottery system for the individals named as ‘set for life’. In such a lottery system, $50000 will be paid to the individual who will be declared as its winner every year. The duration of this lottery will be till twenty years on the same date as it was given to an individual annually. The lottery amount will also be paid to the respective individual in case of death. 
The issue that raised for this lottery system was that will the lottery amount is counted as an income for the individuals or it will be just to make profits from customers? To clear this doubt, there are some laws and regulations that need to be followed. 
According to the Government policies, service tax varies according to the type of business that are done by a company, individuals or a group pf individuals. 
The tax for the lottery system comes under the heading ‘gambling taxes’ that consists of taxes on activities like lotteries, casino and other related lecenses. The services tax on such Gambling taxes are rated according to the Australian Bureau of Statistics that are created for the welfare of public. 
If the lottery system is made for providing charity to the public and meeting the public needs then also services taxes are applied but with different laws according to the Government. Thus, the gambling tax is calculated according to the revenue collected by the gambling companies by performing various activities or gambling games. There are a few approaches that are used in this regard-
· Approach based on turnover:  the percentage of the revenue generated from the gambling games are calculated and collected according to the overall payment made by a customer. 
· Comparison of net gambling expenditures: The conomists use this approach in which the revenue from winner’s payable amount is shared with Government. This revenue is the expenditure made by the gambling companies for the winner of a lottery system. 
· Approach of gross turnover: The turnover of a gambling company is calculated as the gambling tax that has to be paid to the Government. 
Therefore, the gambling taxes are calculated according to the turnover made by the gambling companies annually. Some deductions are done from this turnover such as 35% on goods and services and ten percent on overall sales. To this tax, the profit received by the company from giving the winner’s prize is also counted. In this gambilng tax, funds are also counted (if any). The gambling tax is used as an income for the Government authorities focusing on public welfare in local areas or a state. Here is a list of different types of taxes used by the Government-
· Taxes imposed by the Givernment on the gross amount collected by the gambling company. 
· The licence fees of a gambling company with respect to the state or local area that the company is located in. 
· Other taxes that are related to the event or activities conducted by a gambling company.
Gambling taxes are important for the Givrnment to collect in order to gain political stability of the state or local area. These revenues are used for provoding services to public. If the economic growth is considered, most of the revenues are genrated by the Government from these gambling taxes only. But these tax rates differs according to the area where the gambling companies are located. The way to accept the gambling taxes keeps on changing by the Government policies according to the gambling operations conducted. For example,

HA3042 Taxation LawT2 2018 Individual Assignment(2500 words)Due date: Week 10Maximum marks: 20 (20%)Instructions:This assignment is to be submitted by the due date in soft-copy only (Safeassign –...

Answer To: HA3042 Taxation LawT2 2018 Individual Assignment(2500 words)Due date: Week 10Maximum marks: 20...

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