Taxation Law

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HA3042 Taxation Law Individual Assignment T1.2019

Assessment Details and Submission Guidelines

Trimester T1 2019

Unit Code HA3042

Unit Title TAXATION LAW

Assessment Type Assignment

Assessment Title Individual Assignment

Purpose of the assessment (with ULO Mapping)

Students are required to follow the instructions by your lecturer to confirm any

relevant information. You also need to follow any relevant announcement on

Blackboard to confirm the due date and time of the assignment.

The individual assignment will assess students on the following learning outcomes:

1. Knowledge of tax law concepts 2. Ability to analyse tax law issues 3. Ability to apply legal tax principles.

Weight 20 % of the total assessments

Total Marks 20

Word limit Max 2000 words (acceptable to be 10% above or below this word limit)

Due Date Sunday of week 10 at 11:59PM.

Submission Guidelines

• Answer all questions. • This assignment is to be submitted in accordance with assessment policy

stated in the Subject Outline and Student Handbook. • It is the responsibility of the student who is submitting the work, to ensure

that the work is in fact her/his own work. Incorporating another’s work or ideas into one’s own work without appropriate acknowledgement is an academic offence. Students should submit all assignments for plagiarism checking on Blackboard before final submission in the subject. For further details, please refer to the Subject Outline and Student Handbook.

• All works must be submitted on Blackboard by the due date along with a completed Assignment’s Cover Page.

• The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.

• Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.

Individual Assignment Specifications

Purpose: This assignment aims at assessing students on the Learning Outcome from 1 to 3 as mentioned above.

Assignment Structure should be as the following:

Questions 1: Weighting Depreciation 0.5 Interest 0.5 Total operating cost 0.5 Taxable value 1 FBT 1 Statutory method formula 1.5 FBT liability 0.5

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HA3042 Taxation Law Individual Assignment T1.2019

Conclusion 0.5 Questions 2: Weighting

a. Based on the given information, students are required to determine Daniel Ray’s net capital gain or net capital loss for the year ended 30 June 2019.

10

b. What Daniel will do with a likely net capital gain in this financial year.

2

c. What Daniel will do with a likely net capital loss in this financial year. 2

Assignments’ Instructions and Requirements

Question 1 (6 marks)

On 1 April 2018, Spiceco Pty Ltd provided a car to their employee Lucinda for her private

use. Throughout the 2018/19 FBT year, the cost of the car was $18,000, repairs $3,300

Insurance $2,200, Fuel $ 990 (all above expenses are GST inclusive). Distance travelled

20,000 km (for the entire 2018/19 FBT year), Business use 70% Lucinda contributed

$1,000 towards the cost of the car.

Using the 2018/19 rates, calculate the FBT liability for Spiceco Pty Ltd for the 2018/19 FBT

year, assuming Spiceco Pty Ltd would like to minimise its FBT liability. If there is more than

one method of calculating the FBT liability, conclude which method should be used. Show

full workings to support your conclusion.

Question 2 (14 marks)

Daniel Ray is in his late 50s and would like to plan for his retirement. Daniel has visited his

accountant last week (15th March 2019). As part of his plan he likes to contribute to his

superannuation fund (i.e. BT Super for Life) before end of financial year this year. (i.e. 30

June 2019).

Daniel has different assets worth around $1m and plans to see these and contribute this to

his super fund. He also wants to lease his house and withdrew tax free amounts from huis

super account when he turns sixty in august 2020. As part of his plan to collect $1m for his

super investment, he has sold the following assets:

1- A house located at Doncaster (suburb of Melbourne). Daniel lived in this property for

the last 30 years. At that time, he bought the house for $70,000 and sold the house

for $865,000 in an auction on Saturday 29th June 2019. Out of this, he paid $15,000

to the real estate agent for the sales commission. The buyer deposited $85,000 on

the property, however after 14 days the buyer advised the real estate that he did not

have enough money for proceed with the contract of [purchase, therefore forfaiting

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HA3042 Taxation Law Individual Assignment T1.2019

his deposit to Daniel on 1st May 2019. After this the real estate agent started looking

for another potential buyer.

2- Daniel has an artistic piece of painting by Margaret Preston. He purchased this on 20

September 1985 for $15,000. The painting was sold for $125,000 at an auction on

31 May 2019.

3- Daniel had a luxury yacht that he has since he was active member of Port Melbourne

Yacht Club. He purchased the yacht in November 2004 for $110,000. Daniel sold the

luxury yacht on 1st June 2019 for $60,000.

4- Daniel had shares in BHP mining company, which he has purchased these shares

on 10 January 2019 for $75,000 and sold all of these shares on 5 June 2019 for

$80,000. Indeed, he got a loan of $70,000 in order to buy these shares and incurred

$5,000 interest on the loan. Daniel has paid $250 for stamp duty on the purchase,

and $750 of brokerage fee on the sale of these shares. Daniel spoke to his tax

adviser and he has advised Daniel that $5,000 interest incurred on the loan is a non-

deductible expense.

In his previous financial year’s tax return (i.e. 2017-2018) Daniel has incurred a net capital

loss of $10,000 from the sale of AZJ shares. AZJ shares were the only asset that he sold in

2017-2018 financial year.

(a) Based on the above information, you are required to determine Daniel Ray’s net

capital gain or net capital loss for the year ended 30 June 2019.

(b) What Daniel will do with a likely net capital gain in this financial year.

(c) What Daniel will do with a likely net capital loss in this financial year.

Assignment Structure should be as the following (students responses involves calculations, and students must refer to the relevant legislation and cases whenever required according to the questions).

For question 1, address the following elements:

Depreciation Interest Total operating cost Taxable value FBT Statutory method formula FBT liability Conclusion

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HA3042 Taxation Law Individual Assignment T1.2019

For question 2, address the following parts:

a) Based on the given information, students are required to determine Daniel Ray’s net capital gain or net capital loss for the year ended 30 June 2019.

b) What Daniel will do with a likely net capital gain in this financial year. c) What Daniel will do with a likely net capital loss in this financial year.

Marking criteria

Marking criteria Weighting

For Question 1, students need to answer the following elements correctly: Depreciation 0.5 Interest 0.5 Total operating cost 0.5 Taxable value 1 FBT 1 Statutory method formula 1.5 FBT liability 0.5 Conclusion 0.5 Question 1 Weight 6 marks For Question 2, students need to answer the following parts correctly: Based on the given information, students are required to determine Daniel Ray’s net capital gain or net capital loss for the year ended 30 June 2019.

10

What Daniel will do with a likely net capital gain in this financial year. 2 What Daniel will do with a likely net capital loss in this financial year. 2 Question 2 Weight 14 marks TOTLA WEIGHT: 20 marks

Marking Rubric

Excellent Very Good Good Satisfactory Unsatisfactor

y

Marks

Allocatio

n

For Question 1, students need to answer the following elements correctly

Depreciation Depreciation

figure is

calculated

correctly.

Student

demonstrate

s very good

knowledge

by giving

depreciation

formula.

Minor error

in calculation

of the

depreciation.

Student

demonstrate

s good

knowledge

overall.

Final figure is

incorrect ,

however

some

elements are

identified

correctly.

None of the

depreciation

elements has

been

identified.

0.5

Interest Interest

figure is

calculated

correctly.

Student

demonstrate

s very good

knowledge

by giving

Minor error

in calculation

of the

interest.

Student

Final figure is

incorrect ,

however

some

elements are

None of the

interest

elements has

been

identified.

0.5

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HA3042 Taxation Law Individual Assignment T1.2019

interest

formula.

demonstrate

s good

knowledge

overall.

identified

correctly.

Total operating cost

All the steps

are correct.

The

operating

cost figure

has been

identified

correctly.

Student

demonstrate

s very good

knowledge

by calculating

total

operating

cost.

Minor error

in calculation

of the total

operating

cost. Student

demonstrate

s good

knowledge

overall.

Final total

operating

cost figure is

incorrect ,

however

some

elements in

the formula

are identified

correctly.

None of the

total

operating cost

elements has

been

identified.

0.5

Taxable value Demonstrate

s clear

understandin

g by

answering

the taxable

value figure

and the

formula

correctly.

Acknowledge

s and reflects

on the

calculation of

the taxable

value figure

and the

formula.

Student

demonstrate

s good by

answering

the taxable

value figure

and the

formula

correctly.

Student

demonstrates

sound

knowledge by

demonstratin

g the formula.

But the

answer to the

taxable value

figure was

incorrect.

Has difficulty

understanding

the material.

1

FBT Right formula

of FBT has

been given.

Accurately

answered the

question.

Student

demonstrate

s good

knowledge

by giving

expected

answers to all

questions,

minor error is

evidenced in

the answers.

Student

demonstrate

s good

knowledge

by giving

expected

answers to

all questions,

but fails to

elaborate.

Student

demonstrates

sound

knowledge by

giving

expected

answers to

most, but not

all parts of

the

questions.

Answered

incorrectly

1

FBT Formula Right formula

has been

identified.

Student

demonstrate

s very good

knowledge

by identifying

the FBT

formula.

FBT formula

is correct,

minor error

in elements.

Formula

given shows

some minor

errors.

Formula is not

given,

answered the

questions

incorrectly.

1.5

FBT liability Correctly

calculated

FBT liability.

Student

demonstrate

s very good

knowledge

by giving the

right formula

and

attempting

to answer

the question.

The student

provides the

formula but

not given the

final answer

to the

question.

The student

followed the

formula but

the elements

of formula

are incorrect.

The final

answer is

incorrect.

FBT liability is

not calculated.

Clear focus

and

organisation is

lacking.

0.5

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HA3042 Taxation Law Individual Assignment T1.2019

Conclusion Student is

able to

effectively

and

accurately

conclude the

question.

Student

demonstrate

s very good

knowledge

by giving

expected

answers to all

parts, minor

error is

evidenced in

the answers.

Student

demonstrate

s good

knowledge

by giving

expected

answers to

all questions,

but fails to

elaborate.

Student

demonstrates

sound

knowledge by

giving

expected

answers to

most, but not

all parts of

the

questions.

Conclusion is

not given

correctly.

0.5

For Question 2, students need to answer the following parts correctly

Based on the given information, students are required to determine Dani el Ray’s net capital gain or net capital loss for the year ended 30 June 2019.

Daniel’s CGT

gains and

losses are

calculated

correctly.

Student

demonstrate

s very good

knowledge of

CGT by giving

expected

answers to all

questions,

minor error is

evidenced in

the answers.

Student

demonstrate

s good CGT

knowledge

by giving

expected

answers to

all questions,

but fails to

elaborate.

Student

demonstrates

sound CGT

knowledge by

giving

expected

answers to

most, but not

all parts of

the

questions.

None of the

Daniel’s CGT

gains and

losses are

calculated

correctly.

10

What Daniel will do with a likely net capital gain in this financial year.

CGT

questions is

answered

correctly.

Student

demonstrate

s good

knowledge

by giving

expected

answers to all

questions,

minor error is

evidenced in

the answers.

Student

demonstrate

s good

knowledge

by giving

expected

answers to

all questions,

but fails to

elaborate.

Student

demonstrates

sound

knowledge of

CGT by giving

expected

answers to

most, but not

all parts of

the

questions.

CGT questions

is not

answered

correctly.

2

What Daniel will do with a likely net capital loss in this financial year.

Clear answer

is given to

this part of

the question.

Point of view

is present

and followed

by logical

organisation,

and clear

connection.

Point of view

is present

and followed

by logical

organisation.

Purpose of

the question

is clear, but

missing some

facts.

Answered the

question

incorrectly.

2

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