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Homework answers / question archive / LAWS 19033 – TAXATION LAW AND PRACTICE A ASSESSMENT ITEM 1 – INDIVIDUAL ASSESSEMENT Marks: 40% of the overall assessment for the course

LAWS 19033 – TAXATION LAW AND PRACTICE A ASSESSMENT ITEM 1 – INDIVIDUAL ASSESSEMENT Marks: 40% of the overall assessment for the course

Taxation

LAWS 19033 – TAXATION LAW AND PRACTICE A

ASSESSMENT ITEM 1 – INDIVIDUAL ASSESSEMENT

Marks: 40% of the overall assessment for the course.

Submission: Online via Moodle (Turnitin). Note: Submission in any other format (eg, .zip) will be treated as a non-submission.

Word limit: no more than 2000 words. University assignments are an exercise in identifying and filtering relevant material and communicating answers succinctly. Quality is always more important than quantity. Please ensure that you adhere to the word limit.

Due date:  23 April 2021. Note that Assignments submitted after this date (or a date approved by the unit coordinator after an online extension application) will incur a penalty of 5% of the total marks available for the assessment item per day.

Return to students: For students who have submitted their assignment by the due date, your assignments will be returned to you with feedback on or before 7 May 2021.

Extensions policy: The university policy on extensions of time will be strictly enforced. Extensions will only be considered if made via the online system and based on medical or compassionate grounds. Any extension application should be made before the due date for submission. Medical conditions should be supported by a medical certificate, and, since students are expected to start the assignment early, temporary or last-minute conditions are usually not grounds for an extension. Professionals are expected to manage their time to meet their obligations, so work or personal commitments are insufficient grounds for an extension.

Plagiarism: The university’s plagiarism policy will also be strictly enforced. If plagiarism is found, a minimum penalty is likely to be zero marks for the assessment. It could be worse. This assignment is the only assignment for this course, and it carries a weighting of 40% of the total assessment for the course. While the assignment is largely based on material covered, you are free to research and seek advice as widely as you find necessary—there are no limitations as to sources. However, you must make sure that sources are appropriately referenced.

Objectives: This assessment item links to the unit objectives as stated in the Unit Profile. Details This assignment is to be submitted in one (1) Word document only. This assignment is to be submitted online via Moodle by the due date stated. It is suggested that where necessary you put your calculations into columns or tables to improve readability in the assignment document.

Referencing: Students must use a consistent style of referencing and cite the relevant research source when appropriate. Students may use the in-text referencing style used in their business degree or the Australian Guide to Legal Citation (4th edition).  Footnoting may be required for correct citations of cases and legislation. 

Part A: Case study: Calculate taxable income                             25 marks

Background information

Clara is a schoolteacher who lives in Sydney, Australia. For Christmas 2019, Clara received a $1,000 gift voucher from her father. On the 1st of January 2020, she put this money toward the purchase of a laptop computer which cost $3,500. Clara used this laptop to prepare lesson plans, complete marking tasks and check work emails. She estimates that she uses this computer 60% of the time for work related purposes.

At the start of 2020, Clara became worried about her job security due to the COVID 19 pandemic and decided to start a Master of Data Science. She hopes that having this qualification might make it easier for her to find work in another industry if she were to be made redundant from her teaching position. Her employer did not contribute to the cost of the degree. The course fees for the 2020 income tax year were $20,000, which she paid upfront.

Also due to the COVID-19 pandemic, Clara was occasionally required to act as a relief teacher at other schools in her area. Clara was generally made aware of schools she had to attend for relief duties well in advance, although she was occasionally called in at short notice. On the days that she had to relieve at different schools, she would travel from home to that school, and then home again. She never attended more than one school on any given day.

In addition to her full-time work as a high school English teacher, in the 2019 income tax year, Clara started offering tutoring services for high school students as something to do in her spare time. She started by informally advertising her services via friends and family and on various community pages on Facebook. She used teaching materials that she had already developed in her teaching role for her tutoring.  By July 2019, the number of tutoring clients had grown considerably. Clara decided to develop a business plan and opened a separate bank account for her activities. Clara has advised that she does accept cancellations without notice and does not charge in these instances. She also occasionally cancels a lesson if she has other plans.

 

 

 

 

Required:

  1. Briefly explain why the gift voucher that Clara received for Christmas does not form part of her assessable income. You should support your answer, where appropriate, to the ITAA 1936, ITAA 1997 and ATO guidance materials and/or case law.

  (3 marks)

  1. Calculate the depreciation deduction for the laptop computer, using the diminishing value method only. You should support your answer, where appropriate, to the ITAA 1936, ITAA 1997 and ATO guidance materials.                                              (4 marks)
  2. Can Clara claim the course fees for the Master of Data Science as a deduction under s8-1 ITAA 1997?  Explain your answer with reference to relevant ATO guidance materials and case law.                                                                                      (5 marks)     
  3. Can Clara claim the cost of travelling between her home and the different schools whilst fulfilling her relief obligations as a deduction under s8-1 ITAA 1997?  Explain your answer with reference to relevant ATO guidance materials and case law.

(5 marks)

  1. Discuss whether Clara is carrying on a tutoring business or whether this activity is better classed as a hobby. Your discussion should be supported, where appropriate, with reference to the ITAA 1936, ITAA 1997, Taxation Rulings, other relevant statues and/or case law.                                                                                              (8 marks)

                       

 

 

Part B: Residency question: Private Binding Ruling                                   15marks

You are an officer working in an interpretative advice area of the Australian Taxation Office. You have received a Private Ruling Application from a taxpayer (see Appendix 1), and your manager has requested that you prepare a draft Private Binding Ruling (PBR), using the template provided in Appendix 2 for her to consider.

Please note that professionalism is of the upmost importance in drafting your PBR. In preparing your draft, you may like to refer some of the edited private advice available on the ATO legal database for examples of edited versions of PBRs provided to other taxpayers.

For ease of reference, the details provided by the taxpayer at Question 8 of the PBR are provided below:

 

Question 8: (Note: These are the same facts provided in the PBR Applications in Appendix 1)

I was born in Brisbane in 1989. I left Australia on the 1st of March 2018 to take up employment in Portree in Scotland. I left Australia with my partner, Amelia, and one year old daughter, Melanie. When I departed for Portree it was my intention to reside there with Amelia and Melanie until we were granted permanent residency, which we expected to take approximately 3 years. At that time, we had planned to move to Edinburgh in Scotland so as to have access to better schools for Melanie. We had discussed returning to Australia before Melanie started high school, but we had not made any concrete plans to that effect. We had planned to occasionally return to Australia for short holidays to visit with family and friends. We took one such holiday in December 2019, and stayed with my parents for two weeks.

When I left Australia, I cancelled our health fund membership, gym membership, and sold all of our household items. We had been renting in Brisbane, so we terminated our lease when we left for Portree. I also closed our Australian bank accounts. However, I retained some shares with ABC Pty Ltd, an Australian resident company, which paid dividends to me whilst I was in Portree.  Whilst in Portree, Amelie, Melanie and I lived in three different flats, all of which were rented in joint names. We bought household contents such as electronics and furniture. I started a bank account when I arrived, and my salary was paid into this account. I joined a local soccer club, and Melanie and Amelia attended local groups for young families.

Unfortunately, due to a breakdown of my relationship with Amelia, I returned to Australia at the end of April 2020, after living in Portree for just over 2 years. Since returning to Australia, I have found a new job and have rented an apartment in my own name, bought furniture and have reconnected with old friends.

 

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