Bill's Tax Implications from Timber Sales

This assignment examines the tax consequences of Bill selling felled timber in Australia. It analyzes whether these receipts constitute assessable income under section 6(1) of the Income Tax Assessment Act 1936, considering regulations like 95/6 that govern forestry production and related income. The analysis draws on relevant Australian tax law and case precedents to determine Bill's tax obligations.

Running head: TAXATION
Taxation
University Name
Student Name
Authors’ Note

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Question 1:
Detected Issues from the particular case on Eric
The current segment reflects about a specific scenario in which Eric attained specific assets
that include antique vase, antique chair, painting, home sound arrangement, and shares in
listed corporation. However, Eric sold the said resources after acquirement of the same. This
case intends to ascertain capital gain or loss from the business dealing involved in the
purchasing and selling of the assets. However, as a matter of fact this case of ascertainment of
either capital gain/loss can be associated to the tax instruction stated under 108–(20)
stipulations under ITAA (Halabi et al., 2012).
Taxation diktat that associated to the issue under reflection
Taxation decree/guidelines that can be looked up for the present case includes the ones
mentioned below:

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Particular working associated to taxation directive
Based on the enumeration mentioned in the above table, it can be said Eric incurred a loss of
$1000 from home sound system, $8000 from painting and $2000 from antique chair.
However, the net capital gain obtained from the business transaction amounts to $15000. In
this case, the approach utilized for counterbalancing the loss amount can follow from the
commands mentioned under the law mentioned under section 108 up to 110 of ITAA stated
during 1997 (Waller, 2012). As Eric attained the profit by clearing all the resources of the
firm, thus, no capital can be taken into consideration for deduction in the calculation for the
present year.
Concluding Comment
Based on the analysis of the specific rule mentioned in the taxation regulation, it is not
possible for Eric to give money back for the loss amount from various heads of collectables.
This is because Eric has obtained from clearing assets of the firm.
Question 2:
Detected Issues from the particular case on Brian
The present scenario talks about business transactions related to a bank executive named
Brian. The employer of the bank executive provided Brian a loan worth $1 million at an rate
of interest of 1% per annum. However, the scenario reveals that Brain utilized 40% of the
acquired borrowed source of fund for generation of income and satisfied all the obligations
related to the payments of interest. The present matter of concern is to enumerate the
assessable value of different fringe benefits for the financial year 2016 and 2017. The current
segment also intends to examine whether the answer obtained might be different in case if the

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rate of interest was paid at the conclusion of the loan term instead of monthly instalment
payments. In addition to this, it is also important to know in case if the bank discharged Brian
from paying of the loan interest (Woellner et al., 2011). However, case under reflection can
be related to resolution of issues for determination of fringe benefit tax (FBT), that can be
connected to taxation regulation stipulated under the guideline numbered TR 93/6
(Groenewegen, 2012).
Taxation diktat that associated to the issue under reflection
The regulation that can be referred to in this case include the one mentioned herein below:
Enumeration of FBT
Particular working associated to taxation directive
Analytical evaluation of taxation guideline stated under TR 93/6 help in understanding
process of determination of FBT (Woellner et al., 2011). As per this specific rule, if the
lending bank clears an individual from the need to pay the interest on gathered loan, then that

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individual might be discharged from the liability to make payments for income tax (Woellner
et al., 2011). Therefore, Brain might also be excused from paying the tax.
Concluding Comment
In conclusion it can be mentioned that there is no obligation to settle the tax obligations by
making payments on the part of Brain as he is cleared from the obligation of interest payment
by the bank that delivered the loan.
Question 3:
Detected Issues from the particular case on Jack and Jill
The present matter of concern refers to appropriate provision of gain/loss division among co-
holders of rental possessions (Bentley et al., 2012).
Taxation diktat that associated to the issue under reflection
Particular working associated to taxation directive
The taxation guideline TR 93/32 issues treatment of gain/loss stemming from co-possession
of co- holders of a rental asset (Jordan, 2016). The given case setting indicates towards
analysis of appraisal of tax of the co-holders of rental asset. As mentioned in the given case,
Jack is liable for roughly 10%, on the other hand, Jack’s wife Jill is subject to 90% of the
assets held by both of them. As such, takings are obtained from the rental resource and from
partaking. However, in accordance with the ruling cited under TR 93/32, the rental property
co-held cannot be taken into account as partnership for the purpose of assessment of tax

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(Kennedy et al., 2017). The pertinent ruling TR 93/32 mentions that partnership pact both
oral otherwise written is said to have any influence on the process of doling out of earnings
derived from the rental property under consideration (Woellner et al., 2016).
Additionally, the judgment under this regulation also mentions that co-holders of specific
rental assets under suggestion cannot be observed as partners under ordinary regulation
(Braithwaite, 2016). Basically, joint venture pact is said to exert no impact on the collective
gain/loss shared between holders from a said rental possession (Gamble, 2017). As a result,
co-holders of rental property of holders that is Jack and his wife Jill can lay hands on the
entire property as shared renters.
In this case, judgement of the legal case study on F.C. of T. v McDonald (1987) 18 ATR 957
can be taken into consideration (Gamble, 2017). As per the scenario of the legal case, next of
kin of the person paying tax held two different segment titles as a certain category of
cooperative venture. As such, the pact substantiated between 2 different possessors Jack and
Jill mention that the entire earning derived from the rental possession can be allotted in a
particular fraction of 75% and 25% respectively.
Concluding Comment
In line with the instruction of the law TR 93/32, it can be worked out that for cases of co-
holders of rental assets/properties, loss endured can be even-handedly circulated among co-
holders, although joint possession of rented property cannot be treated the same as
transactions involved in partnership dealings.
Question 4:
The legal instance “IRC v Duke of Westminster [1936] AC 1” talks about tax evading (Ally
et al., 2016). This instance mentions a particular standard in which all the individuals are

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allowed to direct circumstances for permitting obligation of tax. This case states that the
Duke of Westminster essentially employed a particular gardener and compensated him from
the considerable post tax earnings from the Duke. In a bid to lessen the amount of tax, Duke
also ceased payment of wage to the gardener and in its place set down an agreement to make
a payment that is an equal amount (Maurer, 2016). However, under tax rules of the entire
time, this permitted the Duke to ask for a subtraction so as to lessen his taxable earning. This
hereby reduced the entire liability of income tax along with surtax. Essentially, the Inland
Revenue necessarily lost the entire case against particularly Duke. Even though the ruling
was very much striking for different other, these people are also looking for avoidance of tax
lawfully by generating intricate framework. It is also weakened by succeeding cases in which
the courts have taken into consideration the entire effect. Instances of the courts even greater
restrictive approach was necessarily the Ramsay principle in which if a specific transaction
had pre-arranged artificial steps that essentially served no business-related purpose other than
saving tax (Gamble, 2017). These are also necessarily destabilized by the following cases
where courts have referred to the entire influence. In the existing state of affairs, this present
principle within the nation Australia exemplifies that in case if a particular individual manage
success for arriving at the conclusion, then in that case the total inland revenue might perhaps
be exploited for their scheme (Braithwaite, 2016).
Question 5:
Detected Issues from the particular case on Bill
The detected matter of concern in the current situation adjusts around evaluation of income
from the earnings from firm’s sales of felled timber. Essentially, this can be assessed under
taxation instruction mentioned under segment 6(1) of Income Assessment Act during 1936
(Woellner et al., 2016).

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Taxation diktat that associated to the issue under reflection
Particular working associated to taxation directive
Analysis of the given case reveals the fact that Bill essentially owns a large land that has
several pine trees growing on it. In addition to this, the case study also mentions that Bill
wants to employ the land for grazing sheep and thus wants to have the entire land cleaned.
Furthermore, Bill also discovers that a specific logging entity is ready to make payments of
$1000 for all the 100 metres of timber that can acquired from the land. Keeping aside all the
tax issues orienting related to capital gain, in this case Bill is provided advice regarding
receipts from the scheme (Kennedy et al., 2017).
The rules for taxation 95/6 refer to tax consequences that develop from productions along
with forestry. Additionally, this regulation also shows the restriction/limitation to the receipts
of business that is necessarily acquired from the timber selling. In essential, this comprises of
assessable income and examines whether payers of tax are engaged in the process of forestry
works. According to the ruling section 6(1) Income Tax Assessment Act 1936, works of
production are necessarily linked to plantation (Jordan, 2016).
Analysis of the case reflects that Bill did not undertake actions of plantations. In addition to
this, Bill necessarily accepted receipts from the sale proceeds of felled timber. Hence, this
can be regarded as the quantifiable income of the payer of tax (Waller, 2012).

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Concluding Comment
Thus, it can be said that acceptance of various receipts earned from sales that is in this case
from selling of felled timber is assessable earning under section 6-1 declared by ITAA-1997.

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