Australian Law of Taxation Case Study 2022

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Name of Student
Name of University
Author’s Note
Course ID

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Table of Contents
Answer to Question 1:.......................................................................................................2
Answer A:.......................................................................................................................2
Answer B........................................................................................................................2
Answer C:.......................................................................................................................3
Answer D:.......................................................................................................................4
Answer to Question 2:.......................................................................................................5
Issues:............................................................................................................................5
Rule:...............................................................................................................................5
Application:.....................................................................................................................6
Conclusion:.....................................................................................................................8
Answer to Question 3:.......................................................................................................8
Issues;............................................................................................................................8
Rule:...............................................................................................................................8
Application:.....................................................................................................................9
Conclusion:........................................................................................................................9
References:......................................................................................................................10

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Answer to Question 1:
Answer A:
As per the ordinary concepts the capital gain will not be considered as the
income tax. The capital gain started off from the September 20, 1985. All the capital
gain receipts are come under the purview of the tax base. Net capital gains can be
included in the income tax liability of the taxpayer. It is notiable to know that when the
taxpayer purchased any goods before the introduction of the capital gains tax then the
asset is considered as the pre-CGT asset. On the other hand the asset purchased by
the taxpayer after the introduction of CGT it can be considered as the post-CGT asset.
As per the case study provided the father of Halen has bought the antique
painting on February 1985 (Stantcheva 2017). It can be seen that the transactions
made before the CGS implemented so it will be considered as the Pre-CGST. So the
selling of asset will not be considered and the tax will not imposed on the antique
painting which was bought by Halen’s father.
Answer B
As per mentioned in the “section 108-10 ITAA 1997” collectible can be
explained as asset whose use are considered to be personal or the associate of the
taxpayer. As stated in the “section 108-10 (2), ITAA 1997” the list of collectibles has
been provided in this section. The list of collectibles which us mentioned in the
“section 108-10 (2), ITAA 1997” usually include antique, jewelry, art works, coins and
rare stamps. As stated in the “section 102-5, ITAA 1997” the taxpayer should mention
net capital gains for the income year as the assessable income.

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As per mentioned in the case study of Halen, who bought a statue which is
related with the historical sculpture on the December 2018. The case study also
mentions that Halen sold the historical sculpture at 1st January 2018 at the price of
$6,000. It is seen in the case that Halen has earned capital gain and from the selling of
the antique painting (Schepens 2016). The capital gain which is made by Halen will be
taxable as the assessable income under the “section 102-5, ITAA 1997” .
Answer C:
Collectible are surrounded by the special rule for taxation. The capital loss which
is incurred are to be separated from the loss and will be balanced with the capital gain
which the taxpayer has made under the “section 108-10 (1), ITAA 1997”. As per
mentioned in the “section 108-10 (4) of the ITAA 1997” if the taxpayer incurred capital
loss which is raised aginst collectibles must carried forward by the taxpayer in the future
year.
As per the case study Halen had purchased jewelry for the price of $14,000 in
the month of October in the year 1987. This antique jewelry piece is sold by Halen at
the price of $13,000 in the month of March, 2018. It can be observed that Halen has
incurred $1,000 capital loss after the sale of collectibles. The loss realized by Halen
while selling the antique jewelry is to balance with the capital gains which are made by
Halen in that assessment year (Schenk 2017). The capital gain which is realized by
Halen while selling of the statue is to be balanced. As per the “section 108-10 (4),
ITAA 1997”, the capital loss which incurred by Halen can be transferred to the next
assessment year for the calculation of the taxable income.