Australian Taxation Law Principles

This assignment delves into the principles of Australian taxation law. It includes a list of relevant textbooks and journal articles that cover various aspects of the subject, such as corporate taxation, individual income tax, and international tax. The provided materials offer insights into the legal framework, practical applications, and current trends in Australian taxation.

Running head: AUSTRALIAN TAXATION LAW
Australian Taxation Law
Name of the Student:
Name of the University:
Author Note:

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Answer to Question 1
Issue
The provided case requires calculation of net capital gain or net capital loss for the year
(Coleman and Sadiq 2013). Hence, it is important to resolve the situation that arises from net
capital gains or losses as derived from asset sale for a given period of time frame. In this
particular question, Eric bought different assets over past 12 months and decided to sell it. The
assets bought by Eric are antique vase, painting, home sound system as well as antique chair and
shares that are listed business. After selling the assets, it is necessary to calculate capital gains or
loss by keeping in mind whether Eric had net capital gain or loss from sale of these assets
(Grange, Jover-Ledesma and Maydew 2014).
Laws
“Section 108 (20) of the ITAA 1997”
“Section 108 (10) of ITAA 1997”

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Applications
No loss can be measured based on the removal of personal use of assets. In addition, it is
found that counterbalance need to be taken into explanation based on the Section 108-10 of
ITAA 1997 (Grange, Jover-Ledesma and Maydew 2014). It is important to understand the fact
on how Eric dealt with capital loss or gain after disposal of assets. From the section, it is implicit
that CST assets are treated cost base that is not prejudiced to decrease as it involves those where
capital gain or capital loss will not be made (Coleman and Sadiq 2013). In addition, CST assets
that are acquired before 20th of September 1985 should be dealt under the section 108-20 of the
ITAA 1997 as it needs to track stock or any of the personal assets. Consequently, the capital gain
for Eric has current stand of $15000 (Sadiq et al. 2014).
Question 2
To that, it was clearly understood that ATO has formerly issued by the Section Taxation
Ruling TR 93/6 from the perspective of loan account in case of arranging for offset of account
(Kenny 2013). The provided case deals with the issue of Fringe Benefit Tax that is properly
explained under Fringe Benefit Act 1999. The issue that is recognized in the given situation is
related with ascertainment of FBT and in agreement with the “Taxation Ruling of TR 93/6”
(Coleman and Sadiq 2013)

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Applications
According to Australian Taxation Tax, it is noted that Fringe Benefit Tax is the tax that is
paid by the employers for paying benefits as it is offered to the employees (Grange, Jover-
Ledesma and Maydew 2014). It takes into account family of the employees as well as other
associates that are linked together. The benefits that are paid as additional can be treated as part
of wages or salaries of the employees. For example, the benefits that are taken by the directors
from the income tax as well as FBT need to be calculated as taxable value as provided by Fringe
benefit tax (Krever 2013).
At the time of preparing Fringe benefit tax return for the year ended 2016/2017 year, an
individual can continue to use lists of eligible as well as ineligible vehicles or the principle-based

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approach or methods. In addition, the eligible as well as ineligible vehicle lists can be removed
after 2017 (Grange, Jover-Ledesma and Maydew 2014). To that, the product mentioned are
structured for offsetting the rate of interest that is maintained by the clients. The above table
explains the calculation of loan fringe benefits under the section Taxation Rulings TR 93/6. In
this section, it explains how business plans for their loan offset that in actual is known as interest
offset accord. It is further concluded by saying that paying any sum of income legal
responsibility is taken into considered when Brian is unrestricted from paying interest by the
bank (Krever 2015).
It is important to understand person who are liable to pay for fringe benefit tax (Grange,
Jover-Ledesma and Maydew 2014). This is where any person or employer offers any of the
fringe benefits to his employee or the associate of the employee that aligns with status of
employment as paid for fringe benefit tax. Furthermore, the employee for which the employer is
needed to pay fringe benefit tax can be done for past, present or for future employee. The
imposition of fringe benefit tax is mainly proposed to tax companies on situation provided to
their employees as mentioned in the budget among the corporate and tax circles (Morgan,
Mortimer and Pinto 2013). The fringe benefit provided by an employer to his employees in
addition to cash salary or wages payments considered as fringe benefit tax (Coleman and Sadiq
2013).
Question 3
Laws
Section 51 of the ITAA 1997
Taxation rulings of TR 93/32

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FC of T v McDonald (1987)
Applications
In addition, the rulings highlight evaluating regarding the taxable position of co-owners
of those who are not responsible to carry out their values within actions. From the given
situation, it is noted that Jack and Jill need to evaluate their taxable position of the rental
property. In addition, the loss of profits gained from the leasing possessions in actual need to be
managed through co-ownership of rental property and deal out business proceeds and losses.
Thus, the co-owners of the leasing possessions named as Jack and Jill will be investment the
property as joint ventures and this act as an ordinary issue in the given case state of affairs (Sadiq
et al. 2014). As far as Taxation ruling of TR 93/32 is concerned, it highlights the fact when
acceptability for the purpose of income tax can be treated as net income profit or loss. Here, Jack
gets a share of 10% and Jill will get 90% of the total profit gained (Grange, Jover-Ledesma and
Maydew 2014). In that case, if Jack and Jill both sell property when the cost base as well as
reduced cost needs to be taken into addressed with gains or losses in alignment of interest
ownership for specific property
Question 4
The provided case is in accordance with the law named as IRC v Duke Westminster
(1936) that is shown in specific event for the purpose of avoiding tax. In this case, one gardener
was employed by the dyke who actually paid from the post-tax income of Duke (Morgan,
Mortimer and Pinto 2013). Furthermore, it is noted that the tax purpose is chargeable when he
stopped paying the gardener irrespective of paying for the same amount of money. The present
case deals with taxation ruling that enables Duke for claiming deduction from his taxable income

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as it get reduced with the income tax liability. As far as present case is concerned, each person is
entitled for planning the tax avoidance based on the current requirement or preference where no
person can be forced to pay higher amount of tax. This present case study has proper relevance
from Australia where it is clearly mentioned that each of the individual has the right to select
their own transaction where taxpayer achieves the advantage of given asset as a matter of fact
(Novikov, Ling and Kordzakhia 2014). The person will be able to select or choose the option of
the transaction as it will subject to tax or subject that is deducted tax as compared to others. The
case law states the fact about principles where every person or individual should be permitted to
understand the tax affairs and laws properly to avoid further confusion. The cases explained
reveals the fact that courts have looked over the overall impact and made the decisions
accordingly (Schreiber 2013). As far as present case is concerned, the transaction has to be pre-
arranged artificially as well as not served properly for commercial activities. The cases explained
reveals the fact that courts have looked over the overall impact and made the decisions
accordingly. As far as present case is concerned, the transaction has to be pre-arranged
artificially as well as not served properly for commercial activities (Davis et al. 2015).
In the current complex state of affairs, it is noted that the standard within Australia
depicts the fact that if an individual start achieving success for making the results secured, then
the Inland Revenue might be current as a proposal as they cannot force anyone for paying any
increased amount of tax (Woellner 2013).

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Question 5
Issue
The provided case on Bill relates to taxable income as it is explained by the taxpayer as
Bill is the Primary Producer as under Section 6 (1) of the ITAA 1997.
Laws
Subsection 6 (1) of the Income Tax Assessment Act 1936
McCauley v. The Federal Commissioner of Taxation (1944)
Section 26 (f)
Taxation Rulings 95/6
Applications
As far as current situation is concerned, it is noted that Bill owns a large piece of land
where there are several pine trees (Woellner 2013). In addition, Bill principally aims at using the
land for grazing sheep as well as wanted to have it cleared. To that, it is noted that the logging
company had grabbed from his piece of land. These aspects mainly explain assessable income
whether the taxpayers gets indulged with the activities of forestry industry. To that, the forest
operations take into account felling of trees in a forest or plantation where the taxpayers show no
interest about the planted trees (Douglas et al. 2014).
Under Taxation Ruling TR 95/6 that explain about Income tax dealing with primary
production as well as forestry that highlights different deductions that are made available to the
primary producers that is engaged at the time of conducting forest operations or activities
(Coleman and Sadiq 2013). In addition, the deductibility of these expenses cannot be altered by
simple fact that an individual derive income from carbon sequestration activities as it is carried

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on in conjunction and aligns according to forestry activities or operations (Petty et al. 2015).
Here, it is important to consider the fact that general deduction is not allowed for cost of planting
trees when the individual purpose is participating in carbon sequestration activities as well as
those trees as it is not intended to be felled in a business of forestry. In addition, it is because of
the cost for planting in these conditions and is known as capital expenditure. Capital expenditure
for planting trees can be perceived as other income tax treatment that majorly depends upon the
context in which expenditure is incurred when the trees are treated as horticultural plants
(Coleman and Sadiq 2013). The trees that are used for sale of products or parts and the cost for
establishment are mainly written off after referring to the effective life of the plant. Hence, trees
that are used solely for carbon credit arrangements are mainly not cultivated for any of the
products or parts as it does not constitute horticultural pants for the purpose of applying the
horticultural plant deduction as shown in the section (Taylor and Richardson 2013).
As per the case, the concerned sale combines either completely or partial assets of the
business (Ross, Walker and Walker 2017). In that case, McCauley v The Federal Commissioner
of Taxation payments mainly obtains from the grantor under the right of performing the
operations in correct way. From the given case study, it is noted that Bill is treated as a basic
producer because he gets engaged into the process of primary production in accordance to
subsection 6 (1) of the Income Tax Assessment Act 1936 (Coleman and Sadiq 2013). To that, the
forest operations take into account felling of trees in a forest or plantation where the taxpayers
show no interest about the planted trees. In that case, McCauley v The Federal Commissioner of
Taxation payments mainly obtains from the grantor under the right of performing the operations
in correct way (Woellner et al. 2014).

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It is concluded that the outcomes from the cases shows that first case is received from the
amount of Bill that will be taxable under income tax. As far as second case is concerned, the
amount of Bill received by him will be treated as royalty.

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References and Bibliography
Australian Taxation Law Cases 2014. 2014. Pyrmont, NSW: Thomson Reuters.
Coleman, C. and Sadiq, K. 2013. Principles of taxation law 2013.
Davis, A.K., Guenther, D.A., Krull, L.K. and Williams, B.M., 2015. Do socially responsible
firms pay more taxes?. The Accounting Review, 91(1), pp.47-68.
Douglas, H., Bartlett, F., Luker, T. and Hunter, R. eds., 2014. Australian feminist judgments:
Righting and rewriting law. Bloomsbury Publishing.
Grange, J., Jover-Ledesma, G. and Maydew, G. 2014. 2014 principles of business taxation.
Kenny, P. 2013. Australian tax 2013. Chatswood, N.S.W.: LexisNexis Butterworths.
Krever, R. 2013. Australian taxation law cases 2013. Pyrmont, N.S.W.: Thomson Reuters.
Krever, R. 2015. Australian taxation law cases 2015.
Morgan, A., Mortimer, C. and Pinto, D. 2013. A practical introduction to Australian taxation
law. North Ryde [N.S.W.]: CCH Australia.
Morgan, A., Mortimer, C. and Pinto, D. 2013. A practical introduction to Australian taxation
law. North Ryde [N.S.W.]: CCH Australia.
Novikov, A.A., Ling, T.G. and Kordzakhia, N., 2014. Pricing of volume-weighted average
options: Analytical approximations and numerical results. In Inspired by Finance (pp. 461-474).
Springer International Publishing.

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Petty, J.W., Titman, S., Keown, A.J., Martin, P., Martin, J.D. and Burrow, M., 2015. Financial
management: Principles and applications. Pearson Higher Education AU.
Ross, M., Walker, J. and Walker, J., 2017. Multinationals targeted down under. Taxation in
Australia, 52(1), p.22.
Sadiq, K., Coleman, C., Hanegbi, R., Jogarajan, S., Krever, R., Obst, W. and Ting, A.
2014. Principles of taxation law 2014.
Schreiber, U. 2013. International company taxation. Berlin, Heidelberg: Springer Berlin
Heidelberg.
Taylor, G. and Richardson, G., 2013. The determinants of thinly capitalized tax avoidance
structures: Evidence from Australian firms. Journal of International Accounting, Auditing and
Taxation, 22(1), pp.12-25.
Woellner, R. 2013. Australian taxation law 2012. North Ryde [N.S.W.]: CCH Australia.
Woellner, R. 2013. Australian taxation law select 2013. North Ryde, N.S.W.: CCH Australia.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D. 2014. Australian taxation law
2014.

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