Reference no: EM132587018 , Length: 2000 Words

HI6028 Taxation Theory, Practice and Law Assignment - Holmes Institute, Australia

Purpose of the assessment (with ULO Mapping) - Students are required to follow the instructions by your lecturer to confirm any relevant information. You also need to follow any relevant announcement on Blackboard to confirm the due date and time of the assignment.

The individual assignment will assess students on the following learning outcomes:

1. Demonstrate an understanding of the Australian income tax system, the concept of deductions, CGT, general anti-avoidance provisions and income tax administration.

2. Identify and critically analyse taxation issues.

3. Interpret the relevant taxation legislations and case law.

4. Apply taxation principles to real life problems.

Assignments' Instructions and Requirements -

QUESTION 1- John has applied and been approved a licence to operate a casino in Melbourne, which later on he named it The Casino East. John has received 10-year licence from Victorian Government to operate the casino. He also received approval for Casino's building for a long period of time (90 years).

John was instructed by the relevant Government agency to pay $180 million for the approved casino's licence and $80 million as prepaid rent covering the first 10 years of casino's rental. John has negotiated to pay $400,000 rental per year for the remaining 80 years of the lease.

With reference to relevant legislation and case law discuss whether casinos prepaid rent is considered a revenue expense or a capital expense.

QUESTION 2 - Alex Kingsford is a mechanical engineer working for ABC Engineering in Melbourne. Alex owns a property in Dandenong, Victorian where he and his family are residing. He also runs a home-based food catering business, preparing food for local residents and school canteens. Catering business is well-structured. Alex works 15 days a month and earns a substantial income from the catering services business. He is travelling from ABC Engineering workshop to his home-based business by car or sometimes Uber. When he lodged his tax return in July 2019, he has requested a deduction for a substantial amount of travelling expenses between the ABC Engineering workshop and home-based food business.

Alex is now seeking your advice. With reference to relevant legislation and case law discuss whether Alex's travelling expenses between the ABC Engineering workshop and his home-based catering business is an allowable deduction.