Carrying on Business
Income from a business is assessable as
ordinary income (s.6-5(1), Harris).
Deductions allowed under s.8-1(1)(b), providing
none of the negative limbs are satisfied.
Important to know when a business is bein
COMPANIES & PARTNERSHIP LAW ASSIGNMENT 2, 2014
DUE: MONDAY 13 October 11.00 pm
Maximum 1,250 words
Value 15% of overall assessment for the course
This assignment assesses the following course objectives:
CO1. Demonstrate a detailed knowledge of an aspect
O RDINARY INCOME
a Discuss the general characteristicsofordinary income.
b In general terms, indicate how you might determine whether a particular
amount received bya
Taxable income = assessable income less
deductions (see s. 995-1(1) and s. 4-15).
Assessable income = ordinary income plus
statutory income (s. 6-1(1).
Interested in ordinary income in this topic.
Fringe Benefits Tax
Fringe Benefits Tax Assessment Act 1986.
Effective from 1 July 1986.
A tax on non-cash benefits provided to
employees due to the employment relationship.
Employers pay the tax (s.66) at a flat rate of
Derivation of Income
Just as financial accounting determines that the life of a
business is divided up into reporting periods, so it is with
taxation where taxation returns are prepared on a periodic
basis, generally once per year.
We will go through some types of statutory
income that are relevant and discuss their
Please refer to the study guide and the text
for more details.
Assessable income = ordinary i
Exemptions reduce assessable income as
they allow a receipt that may have been
subject to tax to otherwise escape tax.
Therefore exemptions are very important and
you need to be on the look out for them.
It is very
Residence and Source
To whom does Australian Tax Law apply?
Over what geographical area should it apply?
Should Australia be able to tax everyone in all
Clearly the tax acts have their limits where they
can and cant o
Capital Gains Tax
Introduction & approach
A form of statutory income. Parts 3-1 to 3-3 of
Chapter 3 ITAA97. Often abbreviated to CGT.
A section intensive topic. Be prepared to cite lots of
section numbers in your answers.
Prepare summaries ou
The next two topics will consider Allowable Deductions
Operative provision is section 8-1 in the 1997 Act.
>50% change in
2011 - 2013: s.165-12 continuity of ownership test is satisfied for each of these loss
LLQP: QuickFact Formulas
UNDERWRITING & CLAIMS
NEED FOR INSURANCE
Amount of Life Insurance
(Premium rate x rate per $1,000 of coverage in the policy)
+ Policy fee = annual premium
Assume the premium rate per $1,000 is $11.13 and there
Week 6 Tutorial Tax Law
(a) Whether a benefit exists, provided in the FBT year, provided by an
employer or associate or arranger, provided to an employee or associate,
as a result of an employment relationship. Section 136(1)
(b) There must be
Week 7 Tax Law Tutorial Questions
(A) Section 8-1 deductible depending on whether it has been incurred or not
(B) The judicial tests for positive limbs are the Incidental and relevant test
(Ronpibon Tin) and the essential character test (Charle
Tax Law Week 5
(a) Section 102-5(1), it is a form of statutory income
(b) The event occurs if you dispose of a CGT asset s104-10(1) or the disposal
is a change of beneficial ownership s104-10(2), ss109-5(1) & (2)
(c) Discounting is available to
(a) On cash basis, income is derived when the taxpayer receives the cash. On
accruals basis, the income is derived when it has been earned. (J Rowe &
Son v. FCT) Timing when the money has been earned. It is important
because it allows us to det
Week 2 Tutorial Tax Law
The operative provisions of the relevant legislation, rulings from the Australian
Taxation Office, court cases, lists, guides, notes, signposts and examples in the
Income Tax Assessment Act all contribute to establis
Week 4 Tax Law
(A) No it is not an assessing provision it does not assess anything.
(B) There must be a non-cash business benefit provided due to a business
relationship, something that isnt money.
(C) S21A converts non-cash benefits into cash,
Week 9 Tax Law
(a) Purchase of trading stock is deductible under s. 8-1(1), s. 70-25, s. 70-15
(b) There must be a business, which involves the manufacture, sale or exchange
of property of that kind, and it must be held for the purposes of manu
Tax Law Week 8
(a) Not all deductible under section 8-1 as specific provisions do not allow deductions under s.81, they operate by themselves to allow deductions. If it is potentially deductible under s. 8-1
it may be limited by the amount by o
Tax Law Tutorial Week 10
(a) Section 90 of the 1936 Act instructs us to calculate the net income or loss of a
partnership as if it were a resident taxpayer
(b) Section 92 of the 1936 Act governs the distribution of partnership income to
Tax Law Tutorial Week 11
(a) In FCT v Whiting (deceased estate), present entitlement referred to a right
of the beneficiary to demand payment of income from the trustee (a right
to that payment). In Taylor v FCT, present entitlement referred to
Outline of topic
Introduction: accounting versus tax treatment.
What is trading stock.
Meaning of on hand.
Value of trading stock.
Outline of topic
Related party transactions.
Stock appropriated for private use.
Deductions for depreciation of certain
assets used to produce assessable
Concentrating on tangible assets in this
Essentially a specific deduction.
Related to previous topic, ie. relevant for
companies and their shareholders.
Classical system of company taxation operated
until 1986/87. Company profits distributed to
shareholders were effectively taxed, on
Anti-avoidance involves legislation whose sole
aim is to prevent tax avoidance.
Have come across some specific anti avoidance
provisions already. Examples include:
Sections 26-35 and s. 109.
Sections 70-20, 70-90
Taxation Law 1
ACCT 3002 Study Period 2 - 2014
Internal - City West Campus
Welcome to Taxation Law 1. This is a third-year level professional course specifically designed to satisfy
professional accounting requirements.
The readings comprise a selection of important tax cases for study in this course, and
some have been specifically included in tutorial questions.
This introduction provides guidance on reading case law and introduces the court and