Australian Txation Law: Daily Terror Amounting Essay

Question:

Describe about the Australian Txation Law for Daily Terror Amounting.

Answer:

1. “Discussion on whether or not the three payments are income from personal exertion”

From the above case study, it can be stated that three selected payments comes under income from personal exertion. This means that Hillary had written the book personally as well as sells the rights, manuscripts and photos to the Daily Terror amounting $10000 (Woellner et al. 2016). In case Hillary decided to write her own story for personal satisfaction, then also the treatment would have been same in accordance with law. Income derived from personal exertion, it involves earnings, salaries, commissions as well as wages and allowances at the same time (Taylor and McNamara 2014). It held in comparison with employee relations services rendered in desired form. It is important to consider the fact regarding the business procession from corporate activities either in form of partnership or account accessible by the taxpayers. Under the “Section 393-10 of the Income Tax Assessment Act in the year 1997”, it states regarding the business process generated in dealing with the attribute of income in the required way (Sourdin et al. 2015). Income generated from any of the property considers as income from emoluments taken from office activities or profit employment taken by the taxpayers. It is those activities arose from profit generation from property sale in any kind as mentioned in the above case study (Snape and De Souza 2016).

In case contract terms with Daily Terror was based upon attributes whereby Hillary owns story copywriting. Then, it will be considered as selling the copyright story for price amounting to $10000 (Saad 2014). In that case, this particular payment will be dealt as reward for service activities for future analysis purpose. This meticulous casing was in agreement by means of “Brent Vs FCT (1971) 125 CLR 418”. This reveals that payment will fail to consider for sale activities and regarded in form of ordinary income in precise attributes (Robin and Barkoczy 2016). In case Hillary wanted to run business for selling own, articles but she never wrote any story previously. Consequently, in view of the assumption concerning Hilary profits for taking into account it as normal profits for the identical

On significant study, it can be confirmed that assessment presume beneath the Act name as “S-15-2 of Income Tax Assessment Act in the year 1997 (Long, Campbell and Kelshaw 2016). It is mainly not considered as the reward for services but dealt as payment for giving up as copyright activities in the upcoming financial year, these activities comes under the assessment of capital gains tax

On the other hand, if a particular contract is viewed whereby Hillary denies in owning copyright of the article for originally vesting with the Daily Terror (Lee 2014). These particularly happen with the case event for Brent and payment related attributes relation with income for rewards for service. As a result, it will be not measured as assess below the “Section 15-2 of the Income Assessment Act in the year 1997. It is because of the derivation of profit from ordinary income. It is excluded from assessing from “Section 15-2(3) of the Income Assessment Act in the year 1997” (Christie 2015).

2. “Discussion on the effect on the assessable income of the parent”

The above case study reveals that it is important for assuming part of payment amounting to $50000 as interest income (Berg and Davidson 2016). This was the case in accordance with “Riches Vs Westminster Bank Ltd in the year 1947 AC 390 at 400”. This interest rate deals with payment for accounts payable by the creditor has not paid in accordance with due date. There has been noticed that $10000 appears in the payment section that will be made by the son by usage of $40000 for complete 5 years (Barkoczy et al. 2016). This amount was particularly lent for sum amounting to $40000 as ordinary income in accordance with the “Section 6(5) of the Income Tax Assessment Act in the year 1997” and treated as interest income This deals with amount paid especially on loan period expiry on the recommended conclusion (Barkoczy 2016).

On the contrary, interest fails in considering as regular for lump sum amount for future analysis purpose. In this study, it reflects upon parents indicated in the interest for payment of extra amount on regular basis (Long, Campbell and Kelshaw 2016). This was the case regarding the extra payment at a percentage equal to 5% per annum owing from lending amounting to $40000. It is based upon ordinary income in interest form in the most appropriate basis (Long, Campbell and Kelshaw 2016). There was argument regarding the additional payment enhanced by son who fails in constituting ordinary income. This was done under the “Section 6(5) as it deals with mandatory separation of loan amount. Therefore, it can be done based on truth paid for payment mode in case of loan repayment at reasonable extra rate of 5% in the near future (Long, Campbell and Kelshaw 2016). It mainly aims at understanding the fact regarding the tax exemption for future analysis purpose. It enables extra payment of dues in the most appropriate way.

3. Part A

“Determination of Scott Net Capital Gain or Net Capital Loss for the given year ended on 30th June in case of current tax year”

Calculation of Scott Net Capital Gain is illustrated below with proper justification for the year ended 30th June in respect with current tax year (Long, Campbell and Kelshaw 2016).

“Price for Purchase”

90,000

“Purchase based upon month and year”

September in the year 1986

“Price (Selling)”

800,000

“Sale based upon month and year”

Aug-2016

“Years (in numbers)”

29.9

“Gain in Capital”

800,000

“Indexation Tax”

160,000.00

“Price for purchasing”

“90000”

“Cost for Construction”

“60000”

“Land cost (Total)

“150000”

“Proceeds for Disposals”

“800000”

“Capital Gains (Net)”

“650000”

Table: “Scott (Net Capital Gain or Net Capital Loss)”

(Source: Created by Author)

Part B

“Differing whether Scott sold the property to his daughter for $200,000”

“Price for purchasing”

“90,000.00”

“Purchasing based upon month and year”

September in the year 1986

“Price for selling”

200,000.00

“Selling based upon month and year”

Aug-2016

“Years (in numbers)”

29.9

“Gain in Capital”

200,000.00

“Indexation Tax”

60,000.00

“Price for purchasing”

“90000”

“Cost for Construction”

“60000”

“Land cost (Total)

“150000”

“Proceeds for Disposals”

“200000”

“Capital Gains (Net)”

“50000”

Table: “Scott sold the property to his daughter for $200,000”

(Source: Created by Author)

From the above table, it can be understood that Scott transferred the ownership by his daughter (Long, Campbell and Kelshaw 2016). This was the sale attributes for determination of market values in comparison with transfer amount.

Part C

“Differing if the owner of the property was a company instead of an individual”

“Methods for Discounting”

Amount ($)

“Price for purchasing”

“90,000.00

“Purchasing based upon month and year”

September in the year 1986

“Price for selling”

800,000.00

“Selling based upon month and year”

Aug-2016

“Years (in numbers)”

29.9

“Gain in Capital”

800,000.00

“Indexation Tax”

160,000.00

“Price for purchasing”

“90000”

“Cost for Construction”

“60000”

“Land cost (Total)

“150000”

“Proceeds for Disposals”

“320000”

“Capital Gains (Net)”

“170000”

“Gross capital gains”

“260000”

“Less: Exemption”

“130000”

“Net Capital gains”

“130000”

“ Individual Assessment”

“130000”

“Company Assessment”

“222090.26”

Table: “Discounted Method”

(Source: Created by Author)

From the above table, there was discussion with the owner for assessment of income. This deals with discounted method by the owner for getting the benefit for exemption of tax (Long, Campbell and Kelshaw 2016). On the contrary, owner considers company for income assessment in case of capital gains under the indexation method. Total capital arrives at $222090.

Reference List

Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.

Barkoczy, S., Nethercott, L., Devos, K. and Richardson, G., 2016. Foundations Student Tax Pack 3 2016. Oxford University Press Australia & New Zealand.

Berg, C. and Davidson, S., 2016. Submission to the House of Representatives Standing Committee on Tax and Revenue Inquiry into the External Scrutiny of the Australian Taxation Office.

Christie, M., 2015. Principles of Taxation Law 2015.

Lee, Y.T., 2014. Australian taxation issues for Chinese investors investing in Australian real property. Tax Specialist, 17(3), p.102.

Long, B., Campbell, J. and Kelshaw, C., 2016. The justice lens on taxation policy in Australia. St Mark's Review, (235), p.94.

Robin and Barkoczy 2016. Australian Taxation Law 2016. Oxford University Press.

Saad, N., 2014. Tax knowledge, tax complexity and tax compliance: Taxpayers’ view. Procedia-Social and Behavioral Sciences, 109, pp.1069-1075.

Snape, J. and De Souza, J., 2016. Environmental taxation law: policy, contexts and practice. Routledge.

Sourdin, T., Beresford-Wylie, S., March, A. and Shanks, A., 2015. Evaluating Alternative Dispute Resolution in Taxation Disputes. Available at SSRN 2706879.

Taylor, D. and McNamara, N., 2014. The Australian consumer law after the first three years-is it a success?. Curtin Law and Taxation Review, 1(1), pp.96-132.

Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. Oxford University Press.

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