Provide advice to Anna on the income tax consequences

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Reference no: EM132104593 , Length: word count:4000

Taxation Law Assignment -

This assignment consists of two (2) parts.

Part A -

Anna is a jeweller and operates her own business selling jewellery on the Gold Coast. She opened her shop to customers on 1 July 2017. Anna employs two shop assistants. The following information relates to the period from 1 July 2017 to 30 June 2018:

  • Anna borrowed $200,000 from her bank on 1 July 2017 to purchase equipment and stock. The bank charged interest totalling $6,000 during the income year. Anna on-lent $20,000 of the loan to her daughter at 0% interest.
  • Anna leased a small shop from 1 July 2017 and pays $2,000 per month in rent.
  • Legal fees of $4,400 paid on 20 July 2017 for advice relating to establishing the business.
  • Lockable glass display cabinets were purchased for $28,000 and installed on 1 July 2017.
  • A laptop costing $2,200 was purchased on 15 July 2017 to keep accounting and tax records for the business. Anna took this laptop home regularly and estimated 10% of the time it was used for checking her personal social media and email accounts.
  • An opening party was held in the shop for a few local celebrities, where Anna provided champagne and canapes to her guests. This cost $2,500 on 10 July 2017.
  • Jewellery was purchased from various suppliers throughout the year at a cost of $480,000.
  • A security firm was paid $24,000 on 20 July 2017 to provide overnight surveillance of the shop. The contract was paid for the period 20 July 2017 to 19 July 2019.
  • To keep up to date with trends in designer jewellery, Anna attended New York fashion week. She flew business class at a cost of $5,600, if she had flown economy the cost would have been only $1,800. She also paid $2,000 for accommodation and food. She stayed in New York an extra 2 days to catch up with friends costing $600.
  • Salary and wages paid to the two employees totalled $65,000. Anna paid herself $80,000 from the business bank account.
  • Anna accrued $6,000 in her accounts for unused annual leave for her employees at 30 June 2018.

Required: Provide advice to Anna on the income tax consequences of the above transactions for the year ended 30 June 2018. Include calculations where required. Assume that Anna qualifies as a small business entity. Support your discussion with reference to legislation, case law and taxation rulings.

Part B -

You are required to prepare a written research assignment that addresses one of the provided topics below. The purpose of the task is for you to demonstrate high level critical reflection and analytical reasoning skills in the context of the application of Australian taxation law and taxation law policy. You must undertake academic research which demonstrates the following:

  • An in-depth your understanding of how the specific tax law applies,
  • The policy context of the law and if relevant how other jurisdictions deal with similar issues,
  • Critical reflection as to whether the law achieves its stated purpose, aligns with principles of good tax policy or could be improved/amended. These critical reflections should be supported by the research you have undertaken as well as your own independent thought.

Topic Choices -

1. Australia's Self-Assessment System

  • Briefly outline the self-assessment tax system used in Australia;
  • Discuss and critically evaluate the extent to which Australia's self assessment encourages individuals to comply with the taxation legislation;
  • Critique whether you think it is effective in obtaining taxpayer compliance or whether other techniques should be adopted.

2. Work-related allowable deductions

  • Briefly outline the Australian tax law for work-related deductions;
  • Discuss and critically evaluate the extent to which Australia's deduction regime for individual taxpayers satisfies the principles of a good tax system;
  • Compare and contrast this with the deduction system in another jurisdiction, for example, New Zealand.

3. Negative Gearing

  • Briefly outline what is meant by negative gearing and how the Australian tax system treats negatively geared investments;
  • Discuss and critically evaluate the extent to which tax deductible negative gearing impacts upon savings and investment decisions;
  • Evaluate whether negative gearing from a tax perspective should be removed.

4. Company tax rate

  • Briefly outline the company tax base and rate in Australia;
  • Discuss and critically evaluate the Federal Government's policy of lowering the company tax rate to 25%;
  • Discuss potential advantages and disadvantages;
  • Compare to one (1) other country or an alternative policy.

5. Small Business Concessions

  • Briefly outline the Small Business CGT Concessions in Australia;
  • Discuss and critically evaluate the Small Business CGT Concessions in Australia, including the overall policy objectives and your evaluation of whether regime currently meets these objectives;
  • Make conclusions as to whether further amendments are necessary.

Note - Part A consists of a problem solving scenario (1,000 words) and Part B is a research assignment (3,000 words). You must complete both Part A and Part B.

Reference no: EM132104593

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Reviews

len2104593

9/5/2018 12:53:37 AM

Total Word count: 4000. it’s about Australian law. This assignment consists of two (2) parts. Part A consists of a problem solving scenario (1,000 words) and Part B is a research assignment (3,000 words). You must complete both Part A and Part B. Pay careful attention to the marking criteria at the end of each Part. Identification of legal issues, legislation and case law - Overall the student has identified the relevant assessable income issues, legislation and where appropriate case law and rulings.

len2104593

9/5/2018 12:53:32 AM

Application - Demonstrated level of understanding of the law relating to business expenses: General business deductions, Capital allowances, Entertainment expenses and Travel expenses. Conclusions - Overall, the student has drawn appropriate and valid conclusions after applying the law. Description of Performance Standards; the student has shown a very high level of demonstrated ability in relation to the stated criteria by covering all valid points in a clear and succinct manner. The student may have also demonstrated an ability to think beyond the facts and recognise the broader implications of the facts, missing facts or alternate arguments.

len2104593

9/5/2018 12:53:25 AM

Very High level technical understanding of the legal topic demonstrated, no instances of incorrect understanding. Demonstrated an excellent ability to explain tax law concepts in the context of how it is relevant to practical applications in all instances. Practical applications were insightful and relevant. Strong evidence and multiple instances of careful analysis of the research. Strong evidence of an ability to balance and evaluate competing arguments in the literature as well as clearly articulated personal perspectives throughout paper.

len2104593

9/5/2018 12:53:18 AM

Evidence of careful, relevant, high quality and independent research undertaken. No research sources/authors overlooked. Many sources from outside course materials and all high quality. Sophisticated, clear and highly readable expression used throughout. Very appropriate academic language used throughout. Highly persuasive argument built throughout paper. Very clear and logical structure resulting in well supported conclusions/ recommendations. Very high standard of referencing, citations and bibliography. Almost no errors.

len2104593

9/5/2018 12:53:13 AM

The assignment will be graded according to the criterion referenced assessment sheet included with the assignment questions. You should review this document carefully. Students are encouraged to grade their own work against the criteria sheet in order to identify areas for improvement. Your assignment consists of a combination of legal problem questions and a written research question. In both cases, marks are generally awarded on the basis of your identification/discussion/analysis of all relevant issues with arguments logically constructed leading to supportable conclusions. You will not be specifically penalized for reaching a different conclusion to the conclusion that may appear in the suggested solution to the assignment. We expect that you will use appropriate reference to authorities in your discussion. Where calculations are involved you will receive marks on the basis of your calculations and part marks will be awarded where only part of the calculation is correct.

len2104593

9/5/2018 12:53:06 AM

Referencing - In written work, citations or footnotes in the text are used to inform your reader of the source of your information. Direct quotations are always cited. Not only is this a courtesy to the original author, it would be considered plagiarism if you failed to do so. The purpose of the written research task in the assignment is for you to demonstrate high level critical reflection and analytical reasoning skills in the context of the application of taxation law and taxation law policy. You will be asked to choose a particular aspect of taxation law and undertake academic research which demonstrates both your understanding of how the law applies, the policy context of the law and critical reflection (as supported by the research you have undertaken).

len2104593

9/5/2018 12:52:58 AM

Word length - The word count should be conducted in accordance with a Microsoft Word count (not including footnotes or endnotes). This limit does not include footnote references (to cases, legislative provisions, books, articles and websites). However, the word limit does include text set out in the footnotes ie the word limit cannot be circumvented by relocating text from the body of the answer to the footnotes, or by placing text in the footnotes in the first place. You must indicate this word count for the assignment on the title page of the assignment. The word limit is a definite maximum.

len2104593

9/5/2018 12:52:51 AM

The marker of the assignment is entitled to stop marking when the nominated assignment word length has been reached. Any material in excess of the assignment word length need not be included in the marking. It is not the case that a 10% variation is allowed for the word limit: ie that students can exceed the word limit by 10%, or fall short of the word limit by 10%, without being exposed to a penalty. The word limit is a maximum limit only. There is no minimum word length for the assignment, although students should appreciate that, the less that they write, the greater the likelihood that the assignment question has not been answered as well as it could be.

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