Reference no: EM132777000 , Length: word count:2000

Tax Law and Practice Assignment

Assessment Description - This assignment explores practical issues in taxation law. You will work in a group of 4 (max) OR Individually to research relevant material to critically evaluate the following four questions and discuss the law of taxation in Australia . It is important for you to think through how to structure and present arguments with appropriate citations and references throughout the assignment.

Question 1 (500 words)

On 1 July 2019, Jarrod was transferred to the Singapore office of his company, WIN Ltd, for five years. His wife Rosie accompanied him to Singapore. In Singapore they lived in a house owned by the company and leased their Sydney residence. While residing in Singapore Rosie borrowed $200 000 from the ANZ Bank on 1 December 2019, to fund the purchase of 50 000 shares in WIN Ltd.

During the 2019/2020 tax year Rosie received $58 000 as her share of net rental income from the lease of their Australian home, and $3 500 in fully franked dividends from WIN Ltd. She incurred $5 300 to refurbish the bathroom, $2 500 to install the boundary fence between her property and her neighbor's and $1 400 agent management fees in deriving the rental income. Her interest payments on the ANZ Bank loan amounted to $11 300.

On 6 June 2020 Rosie caught a Qantas flight back to Sydney to visit her ailing Mum for 2 months. While in Sydney, she struck luck and won her Powerball ticket to the tune of $2 million. She has since returned to Singapore to celebrate and enjoy her new found fortune with her husband.

Required:
Advise Rosie the Australian tax consequences of these transactions for the 2019/2020 tax year. Refer to the relevant legislation and cases. (Hints: you also need to do some research on the tax consequence of dividends paid to a resident and non-resident)

Question 2 (500 words)

Greg is a medical doctor and a scientist. He works at a local hospital in the mornings, attending to patients. At lunchtime he takes a train to the local university where he works in a research laboratory. At the end of the day, he takes the train home. The train fares for the year include $2,400 from home to hospital, $1,200 between hospital and the local university and another $9,000 from the university back to home.

In the current income year, Greg opens his own practice, servicing local residents. He usually drives to his local practice. The annual car maintenance and service costs $3,800 and 50% usage of the car is for private. He rented an office for
$12,000 a month. In order to run the business, he has to put his beloved dog and cat to a local pet shop for pet minding. He incurs $30,000 pet minding fees for the income year. This pet minding fees cause Greg to take out a small loan from the local bank to catch up with his outgoings. To this end Greg is required to service $242 monthly interest expense for the bank loan. Occasionally Greg is required to travel from his local practice to the local university for his research work and he incurs $800 in travelling expenses this income year.

Greg is also a member of a political party where he donates $800 every year. He also purchases $200 worth of raffle tickets from his political party to help them raise fund in the current income year. On the way home from a meeting convened by his political party, he was caught by a speed camera doing 80km/hr in a 60km/hr zone and a few weeks later he received a Speeding Fine $280.

Required:
Advise Greg as to the tax deductibility for the above expenditures with reference to the relevant tax laws and case laws

Question 3 (500 words)

Simon at all relevant times held a German passport. From the time of his first visit Australia in 2009 until the end of the 2018 income year, he held a visa which permitted him to live and work in Australia.
During the time he was in Australia, Simon worked under contract as a marine engineer on a sea-going barge owned by an Australian company. Subsequently, the barge was leased to a Malaysia-based company, Ocean Development Ltd (OD), for use in carrying out work in China. Simon accepted employment with OD and left Australia on 8 August 2019, leaving his son and wife in Australia. He worked for Ocean Development Ltd for nine months in China and earned AUD $190,000. He then terminated his contract and returned to Australia where he stayed for the rest of the income year. On his arrival back in Australia he entered into a partnership business with his wife.
Accommodation provided for Simon in China by his employer was of a temporary or transitory nature in the form of single men's quarters or barracks. Meals were also provided. Ocean Development Ltd.'s office in Malaysia paid Simon's wages into his bank account in Australia, after deducting tax required to be paid in Malaysia. Simon paid no income tax in China. Simon's assets in Australia are his home in Sydney, an investment residential unit $1,250,000 in Surry Hill, a super policy with AMP worth $2 million, listed shares, bank accounts and membership of a local golf club. Simon intended to be absent from Australia for approximately nine months and was in fact away for that period only.

Required:
For the 2018/2019 and 2019/2020 tax year, is Michael a resident or non-resident of Australia? Refer to the relevant legislation and cases

Question 4 (500 words)

Discuss the law of Taxation in Australia including the following criteria (refer to the relevant legislation and cases):

(a) The legislation involved - particularly the Income Tax Assessment Acts 1936 and 1997 - why both? -
and the New Tax System legislation;
(b) The foundation of our tax system - a mixture of direct and indirect taxation;
(c) Goods and Services Tax and Capital Gains Tax - a brief study.

Attachment:- Tax Law and Practice.rar