Reference no: EM132377605

TLAW603 Taxation Law and Practice Assignment Help and Solution, Top Education Institute, Australia

Case Study: Piper and David Chapman

Please note: the current income year ("CIY") is the 2018/19 income year.

Piper (aged 40) works as a sessional lecturer at Baccalaureate University (BU) in Sydney, and volunteers at a local community centre (CC) (which is a non-profit organisation) providing free legal advice. Her annual salary from BU totalled $25 000 for the CIY. It is clear from the payment summary, that PAYGW of $8 125 was withheld from the above salary. Piper received a Woolworths voucher from the CC valued at $500 in respect of her work at the CC.

Before presenting each lecture, Piper usually bought a meal and a soft drink at a nearby café, which cost her $360 in total, in respect of the CIY. She also purchased clothes to create a professional image at work, which cost her $5 000, in respect of the CIY. Piper purchased a portable printer on 10 July CIY for $250 that she used two-thirds of the time (from the date of purchase) for printing lecture notes, and the other third of the time for printing recipes from the interne. Piper cooks a meal on the odd occasion for her neighbour and charges him a small fee of $25 per meal to generally cover her costs. She may make a very small profit after expenses. She has only done this on four occasions for the current income year.

Piper is studying a further master's degree in law part time. The course fee is $5 000. Her travel between the university (where she is studying) and her home in Sydney, cost her $672 in total, in respect of the CIY. Piper also pays fees in the CIY to the New South Wales Law Society in the amount of $1 200 in respect of her practicing certificate. In the CIY, Piper bought 2 law textbooks which cost $225 each, including a book recommended by a colleague on emotional intelligence which cost $150.

Piper is at all relevant times married to David (aged 45). They both have private hospital insurance for the CIY provided by Cr-KS Health.

Other information in respect of the CIY.

• Where required, Piper prefers to use the prime cost method for the purpose of calculating the decline in value of any relevant assets. The effective life of the printer is two years.
• David received an annual salary in the amount of $60 000 from his employment as a full-time lecturer at BU.
• The hospital insurance policies (referred to here above) each have an excess of $1 000.
• Piper also received an annual salary in the amount of $90 000 from her employment as a solicitor at a law firm in Sydney.
• Piper received interest from a fixed deposit at a South African bank in the amount of R45 000 (ZAR).
• Piper has monies invested in a retirement annuity in South Africa, which was valued at R2 500 0000 (ZAR), when Piper and David permanently immigrated to Australia on 26 September 2015. Piper stopped contributing to the investment after she moved to Australia. She plans to realise the investment and transfer the cash to her bank account in Australia on the last day of the CIY. The current value of the investment on the last day of the CIY is R1 000 000 (ZAR).
• Piper paid South African tax in the amount of R8 100 (ZAR) to the South African Revenue Service in respect of the above interest that she earned in South Africa.
• PAYGW of $20 747 was withheld from Piper's salary by the above law firm. PAYGW of $10 500 was withheld from David's salary that he received from BU.
• All $ amounts refer to Australian Dollars, unless otherwise expressly stated.
• Ignore all double tax agreements.

QUESTION 1 - Calculate Piper's income tax liability in respect of the CIY. Clearly show all the steps of your calculation and use the correct technical income tax descriptions for each step or line item of the calculation.

QUESTION 2 - Calculate David's income tax liability in respect of the CIY. Clearly show all the steps of your calculation and use the correct technical income tax descriptions for each step or line item of the calculation.

QUESTION 3 - Advise Piper of any Australian income tax implications associated with realising the investment in the retirement annuity, and transferring the cash to her Australian bank account, including any strategies that one may employ for legitimately avoiding or reducing any Australian income tax liability in respect of any such investment.

QUESTION 4 - Piper is planning to attend an overseas conference in respect of her studies. The conference will be held on the 1^st September 2019 in Berlin, Germany. The conference will run for about 4 days in total. Critically consider whether Piper may claim any of the expenses, associated with the conference, as an income tax deduction in respect of the CIY.

QUESTION 5 - This question comprises of the evaluation of the group work. Group work will be assessed by considering: (1) the scores and the overall evaluation in respect of each individual member of the group, as recorded in the group work peer-review sheet; and (2) the group's performance during their class presentation, which will generally comprise of a brief oral report, by each group member, discussing the relevant issues of one of the above questions, including successfully addressing any further oral questions by the lecturer.