Subject:

Taxation Law (BBAL501)

Title: Group Assignment
Number of group members: 3 to 4
Submission type: Soft copy (Moodle submission) & Hard copy
Due Date: Week 5.2
Weighting/Value: 20%
Details of task: Students are required to answer all the four questions as per the given requirement.

Marking Criteria
Students are evaluated on their skills to explain and apply their knowledge of the relevant Australian Tax
Laws using the three step process. Briefly that process is:
1. Identification of correct legal issues;
2. Articulation of arguments and application of law to facts; and
3. Depth of analytical thinking shown in logical reasoning and calculations.
Marking Rubric: This group assignment is made up of Four (4) scenario/problem based questions. Each
question will be worth 10 marks. Total 40 marks available for 4 questions. Each question will be assessed
as follows:
Requirement
1) Proper analysis of the scenario by identifying
the correct legal issues. Articulation of
arguments and application of law to facts.
2) Evidence of analytical thinking shown in
logical reasoning, calculations and
recommendations.

Marking Criteria
9.0-10.0: Detail analysis of the scenario using
relevant Tax Law and sections. Proper
application of Law matching the scenario. All
data used correctly. Correct calculations with
proper recommendations.
7.0-8.0: Partial analysis of the scenario using
appropriate Law. Application of Law matching
the scenario. All data used correctly. Correct
calculations with proper recommendations.
5.0-6.0: Short description of the scenario using
appropriate Act only. Application of Law
partially matching the scenario. Correct use of

partial data. Correct calculations with short

recommendations.
3.0-4.0: Short description of the scenario with
no analysis but using appropriate Act only. No
application of Law. Partial correct calculations.
No conclusion given.
1.0-2.0 No description of the scenario. No
Analysis. Identification of correct law matching
the scenario. Shows little ability to collect,
organize and present information.
0.0 No attempt was made to present the report.
No analysis. No identification of laws. No
Calculations.


Scenario 1: Assessable Income (Marks-10)
(Word limit: 500)

Jim Cox, a software designer, and resident of Australia earned the following income for the year ended
30 June 2014:
a) $55000 from sources in Australia
b) The equivalent of Aus$30,000 as salary while working overseas for three months (foreign
income tax amounting to Aus$5000 had been deducted from his income)
c) Fully franked dividend of $10000, and
d) Dividend income of $850 from WYS Ltd, a London based company (15% withholding tax has
been paid).
Required:
1) Analyze Jims situation with relevant Tax Law and calculate the assessable income for the year
ended 30 June 2014. Show proper reasoning to support your decision.
2) Assuming Jim does not have any deductions, what is the tax payable on the income? Show the
calculations in detail.


Scenario 2: Income from personal services and employment (Marks-10)
(Word limit: 500)

Jane and Sally are employed school teachers who have a very wide general knowledge. Both decide to
enter a television quiz program called Lease of the Decade. Under the rules, contestants receive $100
for each appearance, but if questions are answered correctly, they receive substantial cash prizes and
other prizes, such as household items and holiday packages. The holiday packages cannot be transferred
or redeemed, but the organizers of the program allow them to be converted into alternative venues and
accommodation.
Jane and Sally go on the show but Jane is eliminated in the first contest and receives her $100. Sally,
however, makes 10 appearances. She wins cash prizes of $50,000, household appliances worth $20,000
and a trip to Europe with her family valued at $30,000.

Required:
Analyze the scenario given above for Jane and sally by identifying and applying the relevant law. Discuss
and recommend on the assessability of these prizes. Present a conclusion.


Scenario 3: Fringe Benefit Tax (Marks-10)
(Word limit: 500)

Evaluate and show proper reasoning whether the following benefits are fringe benefits or exempt fringe
benefits and, where applicable, the relevant category of fringe benefit. Support your answer with
relevant sections of law:

(a) Payment to employee for the estimated cost of the employees home phone bill as the
employee sometimes has to use the home phone for work purposes.
(b) Provision of accommodation at the family home to a child who is over 21 and works in the
family business.
(c) Payment of employees superannuation contribution by the employer to a complying
superannuation fund.
(d) Loan by Company X to one of its directors, Ron, who is also a shareholder in the company. The
companys rules do not permit loans to directors.
(e) Payment of taxi fare by employer for employee to travel home after working late.
(f) Flowers sent to a sick employee who is hospitalized. The flowers cost $75.
(g) Provision of a car for an employees private use, including payment of all fuel costs by the
employer.
(h) Provision of sandwiches at a lunchtime seminar held at the employers premises.
(i) Provision of an all-expenses-paid holiday to an employee who has had to work every weekend
for the last six months.
(j) Provision of two laptop computers to an employee who regularly attends clients premises.


Scenario 4: Capital Gain Tax (Marks-10)
(Word limit: 500)

Nadin is a client of your tax firm. To fund her career as an artist Nadin sold some of her art collection by
other artists. It consisted of:

(a) An antique ceramic bowl purchased in February 1985 for $4,000. She sold the bowl on 1
December of the current tax year for $12,000.
(b) A sculpture purchased in December 1993 for $5,500. She sold the sculpture on 1 January of the
current tax year for $6,000.
(c) A bronze gure purchased in October 1987 for $13,000. She sold the bronze gure on 20 March
of the current tax year for $13,000.
(d) A painting purchased in March 1987 for $480. She sold the painting on 1 July of the current tax
year for $5,000.

Required
Consider the CGT consequences of the above transactions by determining whether the assets are CGT
assets, collectables or personal use assets. Identify the relevant laws and apply them with appropriate
details required to support your recommendation.

Source:

K Sadiq, et al (2014) Principles of Taxation Law, Thomson and Reuters, Sydney.

Nethercott, et al, (2013), Australian Taxation Study Manual, CCH, Sydney.