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HI6028 Taxation Theory, Practice & Law - Holmes Institute

Case Studies of Specific Deductions and Tax Liability

Learning outcome 1: Demonstrate an understanding of the Australian income tax system, the concept of FBT, Ordinary Income, deductions, general anti-avoidance provisions and income tax administration.
Learning outcome 2: Identify and critically analyse taxation issues.
Learning outcome 3: Interpret the relevant taxation legislations and case law.
Learning outcome 4: Apply taxation principles to real life problems.

Question 1

Calculate Total Assessable Income, Taxable Income, Tax Liability, Student loan (HECS), Medicare Levy, and Medicare Levy Surcharge if applicable, for the taxpayer (Susanne) with the information below:

• Susanne is a single and an Australian resident plans to lodge a tax return for the tax year 2020 - 2021.
• Her total taxable income is $90,000 (Including tax withheld).
• She does not have private health insurance.
• Susanne has a student loan HECS outstanding for her previous study at Sydney University of
$53,000.
• Her employer pays superannuation guarantee charge of 9.5% on top of her salary to her nominated fund.
• Susanne earned a passive income of $10,000 from the investments in shares in the same tax year.

Question - 2

Part-A
What is ‘fringe benefit tax' (FBT)? Explain at least five main salient features of the FBT?

Part -B
Calculate the taxable value of the fringe benefit using the statutory formula in the following case context:
Carron provides his employee (Rabbie) with the use of a Nissan Xtrail car 196 days during the FBT year. During the period, the car travelled 15,000 km. Carron purchased the car last year for $45,000. Rabbie contributed $1,500 towards the cost of running the car and has provided Carron with relevant documentation.

Attachment:- Deductions and Tax Liability.rar