Final stuff - 1 Namu is 25 and he is an Australian resident...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Namu is 25 and he is an Australian resident for tax purposes. He runs a fruit shop where he earned 90000 dollars in net income. He does have private health insurance. What is his tax liability without medicare levy +levy surcharge amount? (and state whether he needs to pay surcharge or not) 18200 * 0% + (37000 – 18200) * 19% + (80000 – 37000) * 32.5% + (90000-80000) * 0.37 = 21247 He does not need to pay medicare levy surcharge because he has private health insurance (will assume it to be appropriate cover) 2. Namu is 10 years old. He received his late Grandfather’s trust distribution of $10000. What is his tax payable? Nil. It is testamentary trust distributions which mean that Namu pays according to adult tax rate. Since his income-tax-free threshold is 18200, he pays no tax. 3. Namu buys a unit and lives in it for 3 years. He then moves out to live with a friend, while his cousin occupies the unit rent free. He does not treat any other dwelling as his main residence. 12 years later, he wants the sell the unit. Can he sell it CGT-free? Yes. “Main residence” is where you are living. However, you may still sell it after an unlimited number of time if it is not for income . E.g. holiday house or for charity. You may move out and use the home for income-generating purposes for a maximum of 6 years before CGT must be paid upon sale. He rented the place out for free . This allows him to retain the main residence status as long as he does not consider other property his main residence. 4. Which of these are considered expense? (Hence tax deductible) - Stamp duty - Legal fees on transfer - Major plumbing work before lease started - Legal fees to draw up a lease - House renovation after tenants left Capital costs are not tax deductible and generally encompasses renovations, major repairs and the costs in the purchase of a house. The expenses are due to direct income-generating costs and are tax deductible.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Only legal fees to draw up a lease is expense as others are capital costs and go into cost base of the house.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern