Australian Tax Law Analysis: Income, Fringe Benefits, and Capital Gains

HA3042
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Table of Contents
Introduction........................................................................................................................................2
QUESTION 1: Discuss Whether or not the three payments are income from personal exertion.
Would your answer differ if she wrote the story for her own satisfaction and only decided to sell
it later?............................................................................................................................................3
QUESTION 2: Calculate the taxable value of the car fringe benefit using the statutory formula..5
QUESTION 3: Discuss the effect on the assessable income of the parent.......................................7
QUESTION 4:....................................................................................................................................8
Conclusion........................................................................................................................................12
References.........................................................................................................................................13
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Introduction
In this report, it discusses the Australian tax laws according to different scenarios. This report
includes the different scenarios that are in first situation, it analyses the income of individual and
on that income tax is to be calculated. In second scenario, it discusses the benefits of FBT with
their calculation. The third situation deals with the loan amount, which is given to the family
members and calculates the assessable income with their impacts. In fourth scenario, it analyses
the amount of net capital gain and net capital loss.
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QUESTION 1: Discuss Whether or not the three payments are income from personal
exertion. Would your answer differ if she wrote the story for her own satisfaction and only
decided to sell it later?
Facts of the case: This case is related to the Australian tax laws. The facts of the case are in
which a Hilary is a climber and the other party that is Daily Terror newspaper offers
$10,000. Hilary accepts this offer and writes the story and assigns the title, interest, right in
the copyright for $10,000. The daily terror newspaper published the story and Hilary
receives money for that. After writing the story she sells manuscript at $5000 to Mitchell
library and photographs for that she received $2000.
Law: According to the Australian tax laws, personal income is the income that can be
produced by the efforts or personal skills of individuals. According to the section 6 of
Income Tax Assessment Act, 1936 personal exertion or income includes the wages,
commissions, fees bonus, superannuation allowance, and retirement benefits. It can also be
asserted that any gratuities and allowances collected and any services provided by the
business can be run by the tax payer (ACCOUNTING, 2017).
Analysis:
From the above facts, it can be asserted that the Hilary wrote a story without the help of the
writer which depicts that she accepts the offers according to the terms and conditions and
also receive the payment. By this observation, it can be determined that it is the income
from personal exertion and it can be assesses as the ordinary income. It can also be
determined that for a taxpayer, who is holder of copyright they have to identify that whether
the copyright is income or capital asset in case of taxation. It can be stated that if the if the
holder is the writer or artist then in that case the copyright is treated as the taxable ordinary
income and in case if the individual is not a writer or artist then it will be recognized as the
capital assets(Stewart, 2017).
In the above case, the Hilary receives the money from the sale of manuscript to the Mitchell
library and receives the $5,000 and $2000 form the photographs of mountaineering. This
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