Advise of the gst obligations and the input tax credit

Reference no: EM132552862

HA3042 Taxation Law - Holmes Institute

Learning Outcome 1: Gain a broad understanding of tax law

Learning Outcome 2: Demonstrate ability to analyse and synthesise complex tax law issues

Learning Outcome 3: Demonstrate ability to apply principles of tax law to complex legal problems

Question 1
John is a sole trader working in his small business as a carpenter. His brother Paul is mentally disabled, who lives with John and is receiving disability support pension.

Required:

Work out John's invalid tax offset for his brother Paul who is an invalid under the following three scenarios:

Scenario 1 - John has $120,000 taxable income in the 2018-2019 financial year from his small business. Paul has $4,000 as an adjusted taxable income.

Scenario 2 - John has adjusted taxable income of $63,000. Paul has adjusted taxable income of $900.

Scenario 3 - John has an adjusted taxable income of $41,000. Paul was severely sick this year and had zero adjusted taxable income.

Question 2
Oliver wanted to repay his loan of $12,000, which he borrowed from National Australia Bank (NAB). He approached his employer on 4th October 2019 and received $12,000 from him at no interest. On 15th February 2020, Oliver had a performance review with his employer when they told him that he was only required to repay half of the loan as he is a good performing employee.

Required:

With reference to the relevant laws, advise Oliver and his employer of the tax consequences of this transaction.

Question 3
David and Emma are married and have some investment properties jointly in Sydney. To structurally manage their investment properties, they signed a formal partnership agreement, and agreed that the net profits from their rental properties would be distributed 95% to Emma and 5% to David. They also agreed that David bear the total losses from the investments.

Required:

With reference to the relevant laws, critically discuss whether David and Emma are in a partnership as investors? Also, discuss whether they are required to lodge a partnership tax return?

Question 4
Anna works for the Eastern Medical Centre as admin officer with a marginal tax rate of 47%. She has just turned 48 in June 2020. Eastern Medical Centre contributed $13,000 under the Superannuation Guarantee Charge. Anna entered into a salary sacrifice agreement with Eastern Medical Centre to sacrifice 10% of her salary into her Superannuation fund. This extra contribution has resulted in an additional contribution of $17,000 for the current income year.

Required:

With reference to the relevant laws, discuss the effect of these arrangements for both Anna and the Eastern Medical Centre. Determine the total tax levied on the contributions to Anna's superannuation fund and the tax effect on Anna's employer. (Maximum 200 words)

Question 5
Darryl Kerrigan is the director of DK Pty Ltd, which is a property investment company in Sydney and the company is registered for Goods and Services Tax (GST). Due to the COVID-19 impact, DK Pty Ltd has decided to rent out their twenty (20) existing office units that they finished in a building project in February 2020.

To negotiate rental contracts, DK Pty Ltd employs a property lawyer, Mr. Dennis Denuto. Dennis is a busy lawyer and his practice income is $300,000 per year. DK Pty Ltd offered Dennis a rent-free office in the city of Sydney in exchange for his service to DK Pty Ltd. The market rental value of the office provided to Dennis is $38,000 per year.

Required:

Advise of the GST obligations and the input tax credit of this arrangements to DK Pty Ltd and Mr. Dennis Denuto.

Attachment:- Taxation Law.rar

Reference no: EM132552862

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