Assessment Task – Tutorial Questions Assignment
Unit Code: HI6028
Unit Name: Taxation Theory, Practice, and Law
Assignment: Tutorial Questions Assignment (Individual)
Due: Week 13 - Friday, Due date: Friday, 26 February 2021, 23:30 pm
This assignment is designed to assess your level of knowledge of the key topics covered in this unit
Unit Learning Outcomes Assessed:
• Demonstrate an understanding of the Australian income tax system, the concepts of income and deductions, CGT, FBT, GST general anti-avoidance provisions and income tax administration.
• Identify and critically analyse taxation issues.
• Interpret the relevant taxation legislations and case law.
• Apply taxation principles to real life problems.
Each week students were provided with three tutorial questions of varying degrees of difficulty. The tutorial questions are available in the Tutorial Folder, for each week, on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions from topics 7 to 12 inclusive and submit these answers in a single document.
The questions to be answered are:
Question 1 (7 marks)
(Note this question is based on the Topic 7 Lecture: Fringe Benefits Tax)
GoodMates Pty Ltd loaned one of its staff, Munir, the amount of $5,000 (interest free) for one month. Due to personal life issues and financial hardship that Munir was suffering, it turned out that demanding the loan will endanger his health and will cause him not to be able to provide basic needs for his family. At the discretion of the board of directors, this loan was waived on compassionate reasons and Munir was informed.
Is the company required to pay any fringe benefit tax? Kindly use the template below and discuss in detail. The link below is also helpful.
Rules and or cases:
(7 marks. Word limit: Minimum of 120 words. Maximum of 150 words)
Question 2 (7 marks)
(Note this question is from the Topic 8 Lecture: Capital Gains Tax)
Ajay Ltd purchased a depreciating asset with the value of $5,000 on 31 March 1989. On the same day, the company paid $50 to transfer the ownership. One year after, on 31 March 1990, this company spent an additional $1,500 for the asset functionality improvement. Later, on 31 March 1992, the company moved to a new place, and paid $200 to transfer this asset to the new location of business. Finally, the asset was sold in 2020 for $12,000 (Ignore GST effect in all calculations of this question).
Calculate cost base, and capital gain (Loss), and capital gain tax, if any, considering Ajay decided to index (if applicable) and the relevant corporate tax rate is 30%.
(You can use your presentation slides for indexation, if required, and round to two decimals only, only use tables and no narration format is allowed, otherwise, the answer would not be marked).
(7 marks. Word limit: minimum 120 to maximum 150 words)
Question 3 (11 marks)
(Note this question is from the Topic 9 Lecture: Goods & Services Tax)
A large company in Australia, called Alex Ltd, supplied $22,000 (GST Inclusive) worth of products to one of its local customers, Beta Pty Ltd, on 1 August 2019. Beta paid this bill in two equal instalments of $11,000 on 10 May 2020 and the second instalment on 15 September 2020.
Discuss how each entity should account for GST. Alex Ltd is a GST-registered entity with ATO and accounts for GST on accrual basis, file BAS monthly and remained registered, while Beta is not registered for GST at all in both years. (No law sections or cases are required to be included in your answer, calculation of GST amount if any is required).
(11 marks. Word limit. Minimum of 120 words. Maximum of 150 words)
Question 4 (11 marks)
(Note this question is from the Topic 10 Lecture: Taxation of Companies)
Calculate the tax liability for Andre, a single tax resident, receiving $1,000 dividend (80% franked) from a large company, called Margin Pty Ltd, which uses imputation tax system and 30% corporate tax rate. Other income and expenses of Andre are as below:
• Employment income $ 63,013 (excluding 16,467 PAYG withholding)
• Allowable Deduction of $500
• Consider Medicare Levy, Medicare Levy Surcharge (if applicable), and relevant offsets.
(No law sections or cases are required to be included in your answer. Please use a table to answer this question, no decimals are required. Tax year 2019/2020).
(11 marks. Word limit: Minimum of 120 words. Maximum of 150 words)
Question 5 (7 marks)
(Note this question is from the Topic 11 Lecture: Tax Avoidance, General Anti-Avoidance Provisions, Income Tax Returns, Assessments, Rulings, etc)
Briefly explain what factors significantly affect tax avoidance. (At least two journal papers from google scholar, from 2019 onwards, must be used with Harvard intext citation style and no reference is required. No direct copy and paste are allowed and you must answer in your own words. You can choose the country or context, meaning the research should not necessarily be done in Australia or for Australia. Your papers are to be uploaded with your submission).
(7 marks. Word limit: minimum 120 to maximum 150 words)
Question 6 (7 marks)
(Note this question is from the Topic 12 Lecture: Trading Stock, Partnerships, and Trust)
Ryan, Maria and Mike are partners in a law firm. The partnership earned $1,200,000 net profit during the financial year ending 30 June 2020 and did not pay any salary to any of the partners during the year. On 1 July 2019, Maria loaned $100,000 to the partnership and received $10,000 interest from the partnership over the 2019/2020 fiscal year, which is already considered in calculating partnership earning for the year. Meanwhile, Maria also earned $200 from gambling. Allowable deductions for Maria during the year consist of $300 paid for allowable professional subscriptions. Calculate net tax liability for Maria (Use tables for your answers, no narration is acceptable and allowed for this question, no case or sections of law are required to be mentioned, only provide calculations please, ignore Medicare Levy and Medicare Levy Surcharge for this question).
The assignment will be submitted via Blackboard. Each student will be permitted only ONE submission to Blackboard. You need to ensure that the document submitted is the correct one.
Holmes Institute is committed to ensuring and upholding Academic Integrity, as Academic Integrity is integral to maintaining academic quality and the reputation of Holmes’ graduates. Accordingly, all assessment tasks need to comply with academic integrity guidelines. Table 1 identifies the six categories of Academic Integrity breaches. If you have any questions about Academic Integrity issues related to your assessment tasks, please consult your lecturer or tutor for relevant referencing guidelines and support resources. Many of these resources can also be found through the Study Skills link on Blackboard.
Academic Integrity breaches are a serious offence punishable by penalties that may range from deduction of marks, failure of the assessment task or unit involved, suspension of course enrolment, or cancellation of course enrolment.
Table 1: Six Categories of Academic Integrity Breaches
Plagiarism Reproducing the work of someone else without attribution. When a student submits their own work on multiple occasions this is known as self-plagiarism.
Collusion Working with one or more other individuals to complete an assignment, in a way that is not authorised.
Copying Reproducing and submitting the work of another student, with or without their knowledge. If a student fails to take reasonable precautions to prevent their own original work from being copied, this may also be considered an offence.
Impersonation Falsely presenting oneself, or engaging someone else to present as oneself, in an in-person examination.
Contract cheating Contracting a third party to complete an assessment task, generally in exchange for money or other manner of payment.
Data fabrication and falsification Manipulating or inventing data with the intent of supporting false conclusions, including manipulating images.
Source: INQAAHE, 2020
If any words or ideas used the assignment submission do not represent your original words or ideas, you must cite all relevant sources and make clear the extent to which such sources were used.
In addition, written assignments that are similar or identical to those of another student is also a violation of the Holmes Institute’s Academic Conduct and Integrity policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through suspension of enrolment. The penalty would be dependent on the extent of academic misconduct and your history of academic misconduct issues. All assessments will be automatically submitted to Safe - Assign to assess their originality.
For further information and additional learning resources please refer to your Discussion Board for the unit.