The Faculty of Business
BULAW 3731 Income Taxation Law & Practice
Assignment: Semester 2/2014
1. See the Instructions and Assessment Criteria in the Course Description and make
sure you follow them!
2. Please answer all parts of the question
3. Attached to this document is a Checklist to be filled in by you and attached to your
essay/assignment. Read this now before you start your research. If you have
followed this checklist, there is a good chance you will do well.
4. All work presented for assessment in this course must comply with the
format outlined in the University's Presentation of Academic Work
publication, available from the bookshop or on-line at
5. All essays must be accompanied by a signed official cover sheet ('Plagiarism
Declaration Form'), available at
www.ballarat.edu.au/ard/business/student_info_webct.shtml and lodged as
appropriate for your campus.
6. You MUST reference in the body of the essay every time you use information from
other people. This requires you to keep a track of where you are taking information
from and then writing the reference up. You should use the Harvard/APA style;
and use the Universityâ€™s new Presentation of Academic Work. The Libraryâ€™s website
also has a citation style guide site. If you plagiarise (intentionally OR unintentionally)
you will be given zero: see Regulation 6.1.1 for more details.
7. DUE DATE:â€¦â€¦. Please check with the Course Description for details of where and
when to submit your assignment. If you need an extension you must ask for one
BEFORE the due date (unless this is impossible).
8. The assignment should not exceed approximately 2000 words.
9. The assignment is worth 25%.
Page 1 of 3Part A
James Cookie is a shipâ€™s officer employed by Sails International Inc, a company incorporated
in Bermuda that owns cruise boats and operates passenger cruises in the Pacific Ocean.
James owns a house in Sydney which was formerly his family home but his estranged wife
and children now live in Singapore. James rents the house to his cousin and family. The
house is let fully furnished; the furniture belongs to James. Whenever he is in Sydney, James
stays in the house and has his own room in which are stored his personal belongings. In the
current income year James spent 80 days in the house. The remainder of the time was spent
on a cruise ship except for 20 days spent visiting his children in Singapore.
The ship on which James serves visits a variety of ports, mainly in the South Pacific. Jamesâ€™s
employment contract was negotiated and signed in Hong Kong.
Required 1: For Taxation purposes, is James a resident of Australia? What is the source of
his salary from Sails International?
Required 2: If James sold his house, would he be entitled to the main residence exemption
in Subdiv 118-B?
On 1 July 2012 Lee commenced business as an architect. He operated as a sole proprietor
from a converted garage at the rear of his residence. Much of his work consisted of preparing
building designs and specifications for local council building permits but he quickly gained a
reputation for quality drawings prepared within tight timeframes. By the end of 2012/13 he
had a small client base of local builders and private referrals and billings (fees) of $75,000.
During the year Lee submitted a design as part of a national competition for the Citadel, the
centrepiece of an urban redevelopment. His visionary design and revolutionary use of local
materials left the judging panel speechless with admiration and, to national acclaim, he was
awarded the prize and commissioned to build the structure. Immediately he borrowed $1
million, rented premises on Main Terrace, acquired state of the art equipment and employed
six draughtsmen and two administrative staff. During 2013/14 his billings were $1.75
Should Lee return on a cash or accrual basis in 2012/13 and 2013/14?
You must refer to appropriate case law. Your answer must include (but should not be limited
to) a discussion of the following:
â€¢ What factors affect the choice of a cash or accrual basis?
â€¢ Does Lee have a choice of the basis he adopts?
â€¢ Does the Commissioner of Taxation have a right to insist on a particular basis?
â€¢ Should Leeâ€™s basis be the same in both years?
Page 2 of 3Federation University â€“ The Faculty of Business
CHECKLIST TO BE ATTACHED TO ASSIGNMENT IN BULAW 3731
Student No. â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦..
Please check that you have done the following. Tick the boxes to show you have!
? Submitted an assignment that is your own work. (You may discuss the essay topics with
others but you cannot copy anotherâ€™s work, give your work to someone else to copy, or work
closely with another student on how to structure or write the essay.)
? The assignment is no more than 2000 words long (excluding abstract, references,
? Read and tried to address the criteria in the Course Description.
? Read and addressed the issues raised in the Universityâ€™s Presentation of Academic Work
? Read Regulation 6.1.1, Plagiarism and asked questions if you are unsure about what it
? Referenced direct quotes (use quotation marks or indent) AND summarising from another
personâ€™s work in the body of the essay. (This includes internet sources).
? Indicated what referencing style you have chosen Harvard/APA and USED IT.
? Answered all parts to the question.
? Used headings (even though this is not a report, headings are encouraged to assist structure
? Proof read the assignment for spelling, punctuation and grammar errors.
? Where required, used relevant sections of legislation, legal rules/principles
? Where required, used cases to support your points or arguments. These cases can be
obtained from textbooks, or the CCH online libraries, articles found via AGIS PLUS TEXT
? Put case citations in the body of the work as well as listing the case in the List of References.
? Discussed the issues as required and put arguments and gave your view.
? Used a range of resources.
? Included a title page with your name, student number, course code and name and lecturerâ€™s
? Have a margin so comments can be added; put page numbers and your name and student
number on each page.
Signed by student: ____________________________________________
Page 3 of 3