Reference no: EM133051427 , Length: 2 pages
The first is a copy of the famous FCT V'S Myer Emporium case mentioned in Topic 3 (Ordinary Income)
The second is the tax ruling called 93/6 on Mortgage Offset accounts. It is also in Topic 3. Have a read of that tax ruling please. Then have a read of the 3rd attachment which is an article on Mortgage Offset accounts by a well-known financial planner.
If you would like to earn some participation points please in bullet points explain the key points of mortgage offset accounts and how they can help financially people that hold them. Please limit yourself to one typed page. It is also a great idea to do some research on the internet and see how banks advertise these products. Please submit by noon next Monday by email to me. I will also find some other exercises for you to do during the trimester as well.
Take a look at the small educational article that I issued to you about a week or 10 days' ago and any other information you can find in text books or on internet sites. I would like you to explain how imputation works when it comes to individual resident taxpayers who buy shares and receive franked dividends. Do not worry about what happens when the shareholder getting dividends is a resident company as we will get to that later in the trimester.
In your explanation try to also work out what the situation would be for the individual taxpayers if the imputation system did not exist. That way you can see what group of taxpayers really benefit from imputation. You may want to have a look at taxpayers with different marginal tax rates in that respect. There is no need for you to compare with how dividends are taxed in other countries. That would be nice but we do not have time.
Read the article and then regarding Scenario 3, put on a Word document how you believe the $97,500 Net Capital Gain was arrived at (and of course the vendor taxpayer will need to pay his/her marginal income tax rate plus Medicare levy on this). Also give your opinion as to whether you believe this is a fair outcome when the vendor loses the main residence exemption on the piece of land sold off despite the fact that the land sold off for many years was part of the family home/land package.
In addition, if you would like to make up a short bullet-point summary comparing all 3 scenarios (a more difficult task).
Attachment:- Mortgage offset accounts.rar
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