Reference no: EM132806373

HI6028 Taxation Theory, Practice, and Law - Holmes Institute

Learning Outcome 1: Demonstrate an understanding of the Australian income tax system, the concepts of income and deductions, CGT, FBT, GST 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

(Fringe Benefits Tax)

GoodMates Pty Ltd loaned one of its staff, Munir, the amount of $5,000 (interest free) for one month. Due to personal life issues and financial hardship that Munir was suffering, it turned out that demanding the loan will endanger his health and will cause him not to be able to provide basic needs for his family. At the discretion of the board of directors, this loan was waived on compassionate reasons and Munir was informed.

Is the company required to pay any fringe benefit tax? Kindly use the template below and discuss in detail.

Facts:

Rules and or cases:

Application:

Conclusion:

(Maximum of 150 words)

Question 2

Ajay Ltd purchased a depreciating asset with the value of $5,000 on 31 March 1989. On the same day, the company paid $50 to transfer the ownership. One year after, on 31 March 1990, this company spent an additional $1,500 for the asset functionality improvement. Later, on 31 March 1992, the company moved to a new place, and paid $200 to transfer this asset to the new location of business. Finally, the asset was sold in 2020 for $12,000 (Ignore GST effect in all calculations of this question).

Calculate cost base, and capital gain (Loss), and capital gain tax, if any, considering Ajay decided to index (if applicable) and the relevant corporate tax rate is 30%.

(You can use your presentation slides for indexation, if required, and round to two decimals only, only use tables and no narration format is allowed, otherwise, the answer would not be marked).

(150 words)

Question 3

(Goods & Services Tax)

A large company in Australia, called Alex Ltd, supplied $22,000 (GST Inclusive) worth of products to one of its local customers, Beta Pty Ltd, on 1 August 2019. Beta paid this bill in two equal instalments of $11,000 on 10 May 2020 and the second instalment on 15 September 2020.

Discuss how each entity should account for GST. Alex Ltd is a GST-registered entity with ATO and accounts for GST on accrual basis, files BAS monthly and remains registered, while Beta is not registered for GST at all in both years. (No law sections or cases are required to be included in your answer, calculation of GST amount if any is required).

(Maximum of 150 words)

Question 4

(Topic 10 Lecture: Taxation of Companies)

Calculate the tax liability for Andre, a single tax resident, receiving $1,000 dividend (80% franked) from a large company, called Margin Pty Ltd, which uses imputation tax system and 30% corporate tax rate. Other income and expenses of Andre are as below:
• Employment income $ 63,013 (excluding 16,467 PAYG withholding)
• Allowable Deduction of $500
• Consider Medicare Levy, Medicare Levy Surcharge (if applicable), and relevant offsets.

(Word limit: Minimum of 120 words. Maximum of 150 words)

Question 5

(Note this question is from the Topic 11 Lecture: Tax Avoidance, General Anti-Avoidance Provisions, Income Tax Returns, Assessments, Rulings, etc)

Briefly explain what factors significantly affect tax avoidance. (At least two journal papers from google scholar, from 2019 onwards, must be used with Harvard intext citation and referencing style. Please note that you must include the link of your chosen journal papers when referencing them. No direct copy and paste are allowed and you must answer in your own words. You can choose the country or context, meaning the research should not necessarily be done in Australia or for Australia).

(Word limit: minimum 120 to maximum 150 words)

Question 6

Ryan, Maria and Mike are partners in a law firm. The partnership earned $1,200,000 net profit during the financial year ending 30 June 2020 and did not pay any salary to any of the partners during the year. On 1 July 2019, Maria loaned $100,000 to the partnership and received $10,000 interest from the partnership over the 2019/2020 fiscal year, which is already considered in calculating partnership earning for the year. Meanwhile, Maria also earned $200 from gambling. Allowable deductions for Maria during the year consist of $300 paid for allowable professional subscriptions. Calculate net tax liability for Maria (Use tables for your answers, no narration is acceptable and allowed for this question, no case or sections of law are required to be mentioned, only provide calculations please, ignore Medicare Levy and Medicare Levy Surcharge for this question).

(Word limit: minimum 120 to maximum 150 words)

Attachment:- Practice, and Law.rar