HA3042 - Australian Taxation law
14 Pages2770 Words252 Views
Added on 2019-11-19
HA3042 - Australian Taxation law
Added on 2019-11-19
ShareRelated Documents
Running head: AUSTRALIAN TAXATION LAWAustralian Taxation LawName of the StudentName of the UniversityAuthor’s Note
1AUSTRALIAN TAXATION LAWTable of ContentsAnswer to Question 1......................................................................................................................2Requirement 1..............................................................................................................................2Requirement 2..............................................................................................................................3Requirement 3..............................................................................................................................4Requirement 4..............................................................................................................................5Answer to Question 2......................................................................................................................6Answer to Question 3......................................................................................................................9Answer to Question 4....................................................................................................................10References......................................................................................................................................11
2AUSTRALIAN TAXATION LAWAnswer to Question 1Requirement 1Issue: The main issue is to determine that whether the cost to move machinery to a new site willbe treated as allowable deduction or not as per Section 8-1 of the IITA 1997.Legislation: In this issue, the necessary legislations are shown below:I.Section 8-1 of the Income Tax Assessment Act 1997II.British Insulated & Helsby CablesApplication: The cost that is related with the moving of the machinery to a new site is capital innature and as per the act of 8-1 of the Income Tax Assessment Act 1997; there is not anyallowable deduction on this cost (Taylor and Richardson 2012). In this regard, it needs to bementioned that capital expenditure is the kind of expenditure that the business organizationsincur for acquisition and maintenance of fixed assets such as land, building, machinery,equipment and others. As per the purpose of depreciation, to move the machinery to a new sitehas incurred the cost of the particular asset. The cost related with the moving of the machinery toa new site is taken place from the small changes and under the section of section 8-1 of theIncome Tax Assessment Act 1997; it needs to be allowed as allowable deduction. The mainreason to consider the cost of moving the machinery for allowable deduction is that the cost is amajor part of the operating expenses of the businesses and it has occurred out of the day-to-dayactivity of the business (Taylor and Richardson 2013).According to the given verdict in the case of British Insulated & Helsby Cables, thetransportation cost of the contributed to the increase in benefit of the business by proving a shiftto the depreciable assets. According to the Taxation Ruling of TD 93/126 on machinery
3AUSTRALIAN TAXATION LAWinstallation and the commencement of the function of the machinery, the cost related to themoving of the machinery needs to be treated as revenue. Thus, in the provided situation, the costto move the machinbary to a new site is capital expenditure and needs to be treated as non-permissible deduction (Lignier and Evans 2012).Conclusion: Thus, based on the above discussion, it can be concluded that the cost to move themachinery to a new site is capital in nature and the cost will not be considered for allowablededuction as per section 8-1 of the Income Tax Assessment Act 1997.Requirement 2Issue: The major issue in this case is to determine whether the asset revaluation to affect theinsurance cover would be considered as permissible deduction as per section 8-1 of the IncomeTax Assessment Act 1997. Legislation: The major legislation in this case is section 8-1 of the Income Tax Assessment Act1997.Application: According to the provided situation, it can be found that the expenditure is relatedwith the fixed assets. Thus, in the process to determine the amount of deduction, it is also crucialto determine that whether the specific expenditure has occurred out of the assets revaluation(Zakaria et al. 2014). It needs to be acquired for to increase the capacity of revenue production orto protect the assets. In case the latter results in temporary character and the expenditures arerepetitive, then it needs to be treated as permissible deduction under section 8-1 of the IncomeTax Assessment Act 1997 (Sawyer 2013). As per the observation of the provided situation, therevaluation cost of the asset to affect cover of insurance needs to be treated as allowablededuction as per Section 8-1 as they are repetitive in nature.
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Taxation Law Answer to Question Assignmentlg...
|14
|2328
|276
Assignment Taxation Law | Income Tax Assessment Actlg...
|13
|2637
|126
Taxation Law Name of the Student Name of the Universitylg...
|12
|1786
|370
HI3042 - Taxation Law | Holmes Institutelg...
|12
|2216
|61
Law Assignment | Utilization of Taxation Lawlg...
|15
|1793
|186
Assignment on Income Tax Assessment Actlg...
|15
|2018
|32