Assessment Task – Tutorial Questions Unit Code: HI6028 Unit Name: Taxation Theory, Practice and Law Assignment: Tutorial Questions 2 Due: 11:30pm 26th June 2020 Weighting: 25% Total Assignment Marks:...

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Assessment Task – Tutorial Questions Unit Code: HI6028 Unit Name: Taxation Theory, Practice and Law Assignment: Tutorial Questions 2 Due: 11:30pm 26th June 2020 Weighting: 25% Total Assignment Marks: 50 marks Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit Unit Learning Outcomes Assessed: 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; 2. Identify and critically analyse taxation issues; 3. Interpret the relevant taxation legislations and case law; 4. Apply taxation principles to real life problems. Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 6 to 10 inclusive and submit these answers in a single document. The questions to be answered are: Week 6 Mason is a car painter with Melbourne Collision Repair Centre. Mason studying BPA and his employer pays for his course fees at Holmes Institute costing Mason $12,000. Also, Mason lives in a unit apartment in Brisbane, which is provided to him by Melbourne Collision Repair Centre as his employer as fringe benefit. The market value rent for the apartment is $500 per week, and Mason pays $100 of rent per week for the apartment. Required: Advise the FBT consequences of Mason’s remuneration package (10 marks, maximum 200 words). 2 Week 7 Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000. Required: With reference to relevant legislation/case law, determine: a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method. (8 marks) b) How would your answer to a) differ if the owner of the property was a company instead of Alex? (2 marks, maximum 100 words) Week 8 Bowens Pty Ltd is a building materials supplier in Victoria. Bowens Pty Ltd has an annual turnover of $24 million, and works under the accrual method of accounting. Bowens Pty Ltd purchases concrete mixer for $660 each from Builder’s Choice Pty Ltd, a company in Geelong with an annual turnover of around $21 million, and works under the accrual method of accounting. Bowens Pty Ltd plans to sell the concrete mixers at a 200% mark-up to its customers. In October last year it purchased 110 concrete mixers but in December they discovered that 12 of the concrete mixers were faulty and subsequently returned these faulty concrete mixers to the manufacturer, obtaining a full refund. Assume both apply the accrual method of accounting. Required: With reference to relevant laws, discuss the GST consequences of this arrangement for both Bowens Pty Ltd and Builder’s Choice Pty Ltd. (10 marks, maximum 400 words). Week 9 Due to COVID-19 impact, Watson Co becomes insolvent and placed into voluntary liquidation by its directors. Dissolve liquidators have been appointed as the company liquidators. On the winding up of the Watson Co, Dissolve liquidators have started distributions and Paul as ex-shareholder of Watson Co received $7,200 from the liquidators, which was inclusive of $3,000 unfranked dividend pursuant to the provision of Income Tax Assessment Act 1963, section 47(1). This distribution to Paul was from his $4,000 investment in the shares of Watson Co on 2nd February 2019. Required: With reference to relevant provisions of ITAA 97 and ITAA 36, critically analyze the tax consequences of the above scenario for Paul. (10 marks, maximum 300 words). 3 Week 10 Steve and his cousin Alex started an equal partnership business, Euca Sanitizers, motivated by the increase in the recent demand for hand sanitizers during the COVID-19 pandemic. Steve lives in Sydney and is an Australian resident for tax purposes. Alex however, is resident of New Zealand and is a foreign resident for tax purposes in Australia. On 30 June 2020, Euca Sanitizers partnership net income is $300,000, 60% of this income is generated from selling hand sanitizers to Australian retailers and 40% comes outside Australia from sale of hand sanitizers to New Zealand retailers. Required: With reference to relevant provisions of ITAA 97/ITAA 36, discuss how the partnership income is taxed. (10 marks, maximum 200 words). Submission Directions: The assignment has to be submitted via Blackboard. Each student will be permitted one submission to Blackboard only. Each student needs to ensure that the document submitted is the correct one. Academic Integrity Academic honesty is highly valued at Holmes Institute. Students must always submit work that represents their original words or ideas. If any words or ideas used in a class posting or assignment submission do not represent the student’s original words or ideas, the student must cite all relevant sources and make clear the extent to which such sources were used. Written assignments that include material similar to course reading materials or other sources should include a citation including source, author, and page number. In addition, written assignments that are similar or identical to those of another student in the class is also a violation of the Holmes Institute’s Academic Conduct and Integrity Policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through to suspension of enrolment. The penalty would be dependent on the extent of academic misconduct and the student’s history of academic misconduct issues. All assessments will be automatically submitted to SafeAssign to assess their originality. Further Information: For further information and additional learning resources, students should refer to their Discussion Board for the unit.
Answered Same DayJun 16, 2021HI6028

Answer To: Assessment Task – Tutorial Questions Unit Code: HI6028 Unit Name: Taxation Theory, Practice and Law...

Rithik answered on Jun 24 2021
165 Votes
Taxation Theory, Practice and Law
Table of Contents
Week 6    3
Week 7    3
A.    3
B...................................................................................................................................................4
Week 8    4
Week 9.............................
................................................................................................................5
Week 10...........................................................................................................................................6
References.......................................................................................................................................7
Week 6
FBT is known as Fringe Benefits Tax it is different from other taxes and it is considered to be payable by the employer for the non cash benefits that is provided to the workers and the fringe benefits consists of certain types of mobiles, laptops, phones and electronic items. Thus, by providing the fringe benefits to the workers it results to reduced the amount of salary by the FBT payable and it adds in the salary packaging with the arranging of workers. Generally, the FBT is considers as a value of worth, which the worker is received, along with their salary (Khurana & Sharma, 2016).
The advise of the FBT consequences of masons remuneration is that the mason is already working with the Melbourne Collison Repair Center and the companies terms and policies were the employees that are working with the particular company they will be get then services of the fringe benefit. Besides that due to the fringe benefit the value of their salary will diminishing that is the reason that mason paying the rent value less than the actual value of the apartment and it will effect the salary of the mason that he will get at end of the month.
Week 7
    PARTICULARS
    AMOUNT ($)
    Total Sales value
    1,400,000
    Less: Cost of land
    (110,000)
    Cost of construction
    (100,000)
    Profit on sale
    1,190,000
A.
As per the Australian Government, discount rate is 50% and capital gain on discounted method is 595,000. Before the 12 months and more, the property should be bought.
Capital gain on indexation method:
The eligibility of maintaining the indexation method is if the capital gain tax event happened before 11.45 am by (legal time in account) on 21 September, 1999 and the owner owned the particular asset for 12 or more months.
B.
In order to differ the owner of the property, there is some properties, which help to identify to judge between the owner and a company (Lourdunathan& Xavier, 2017). In context with if the company holds the asset or owned the asset for 12 month or more than that then it that case the company is accessible to use the...
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