Tax Deductions and Assessable Income
Added on 2020-02-24
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Running head: TAXATION LAWTaxation lawName of the studentName of the universityAuthor note
1TAXATION LAWTable of ContentsAnswer I.................................................................................................................................2Answer II................................................................................................................................2Answer III..............................................................................................................................3Answer IV..............................................................................................................................3Answer V...............................................................................................................................4Answer VI..............................................................................................................................4Answer VII.............................................................................................................................5Answer VIII...........................................................................................................................5Answer IX..............................................................................................................................6Answer X...............................................................................................................................6Answer 2....................................................................................................................................7References................................................................................................................................10
2TAXATION LAWAnswer IUnder Taxation Ruling under TR 1996/6, benefits accrue under the standard programof frequent flier are not added with the assessable income of the member as the benefitsaccrue from the personal relationship that is contractual that is not the productive under theassessable income. The deductions is subjected to the following provisions –The membership is restricted exclusively for the natural personsPoints can be redeemed only for services or goods1However, as per the ruling, the amount shall be treated and will be taxable as Fringebenefit tax if the following conditions are satisfied –The employees are entitled to the rewards owing to some special arrangementsThe employer and employee is related as family member and he is entitled to thepoint owing to his employment with the airline companyAs per the given situation the employees are getting the points with regard to theiremployment with the company and therefore the amount will be treated as business expensefor the employer. Therefore, the reward points received by the employees will be allowed fordeduction as it will not come under fringe benefit tax Answer IICompensation paid on account of damaging the capital asset of the service providerthe amount will not be added to the assessable income of the service provider who willreceive the amount. However, the received amount to be qualified as deduction some specificconditions are required to be met. These conditions are – 1Chartered Accountants Australia & New Zealand (2017) CAANZ https://www.charteredaccountantsanz.com/
3TAXATION LAWThe asset offered for providing service shall be of capital nature and exclusively usedby the service provider for business purpose onlyDepreciation must be provided for the asset and the depreciation must be recorded inthe books of accountsThe amount received for damage must be used solely for repairing the part that wasdamaged2The asset must be damaged during the time period under which the asset was usingfor providing the serviceFrom the above discussion, it can be concluded that the amount received by craneHire Company on account of damage of their asset shall not be included as assessable incomefor tax if the above mentions conditions are satisfied.Answer IIIAs per TR 1999/10, Para 71 to 78, gifts received by any person will not form part ofthe assessable income for tax if the gift is received due to personal reasons and it is no wayconnected with the person’s work related activities. However, if the gift is received withrespect to or in consideration with the work-related activities of the person, the gift will beadded under the assessable income for tax. Further, the gift can be transformed into money orkind or cash, however the assessable nature of gift will not alter3. Therefore, holiday packageoffered by alcohol supplier to the night club manager will be treated as income under theassessable income for tax.2CPA Australia (2017) Cpaaustralia.com.au https://www.cpaaustralia.com.au/3Karin Simon, Sara McDonald, Accident Investigation - Databases - Library Guides At Cquniversity (2017)Libguides.library.cqu.edu.au http://libguides.library.cqu.edu.au/content.php?pid=166733&sid=2668174
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