Individual Taxation Law Project
Added on 2020-10-23
12 Pages3619 Words164 Views
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Individual Taxation Law project
TABLE OF CONTENTSINTRODUCTION ...............................................................................................................................3QUESTION 1.......................................................................................................................................3Topic cover by Taxation ruling 2018/4.............................................................................................3Division of the Income Tax Assessment Act 1997 details available tax offsets...............................3Top tax rate applicable to a resident taxpayer in the 2018/19 tax year............................................3One example of an asset that is exempt from capital gains tax........................................................4CGT event B1 s104-15 tax...............................................................................................................4Formula contained in s4-10(3) ITAA 1997......................................................................................4Significance of the High Court case, FC of T v Day 2008 ATC 20-064 in the topic of deductions4Difference between marginal rate of tax and average rate of tax.....................................................4Consumption tax...............................................................................................................................5QUESTION 2.......................................................................................................................................5Tax deduction available to an Australian resident taxpayer are as follows:.....................................5a........................................................................................................................................................5b. ......................................................................................................................................................5c. ......................................................................................................................................................6d. ......................................................................................................................................................6e. ......................................................................................................................................................7QUESTION 3.......................................................................................................................................7QUESTION 4.......................................................................................................................................8QUESTION 5.......................................................................................................................................8CONCLUSION ...................................................................................................................................9REFERENCES................................................................................................................11
INTRODUCTION In UK, taxation aspect involves payment at three levels of government namely local, centraland devolved. Tax authorities do several amendments in rules and regulations with the motive toensure smooth functioning of such process. By referring concerned laws business entities andindividuals can determine tax obligations more effectually. The present report is based on differentcase situations which in turn provides deeper insight about deductions available with regards toexpenses incurred and income generated. Further, it will also develop understanding about IncomeTax Assessment Act (1997) and associated rulings. QUESTION 1Topic cover by Taxation ruling 2018/4Taxation ruling 2018/4 convers the topic of effective life of assets which gets depreciatedafter certain period of time. By this way companies or valuator can determine declining value ofany asset (Woellner and et.al., 2016).Division of the Income Tax Assessment Act 1997 details available tax offsetsIn Division 13 tax offsets details are available. Furthermore, division 61 also applicable to taxoffsets as subdivision 61-A deals with dependant and determine who is applicable to tax offsetand subdivision 61-D describes low or middle income tax offset (Fitzpatrick, 2019).Top tax rate applicable to a resident taxpayer in the 2018/19 tax yearAs per Australian taxation system 2018/19 Australian resident have to pay taxes on theirincome according to set tax rate. Top tax rate is illustrated as below:Income slapTax RateTax payable on income$0-182000%No tax need to be paid byindividual on that incomeslap$18201-3700019%Above $18200 individualwill have to pay 19c forevery $1$37001-9000032.5%Individual will have to pay32.5%3572plus of amountmore than 37000$90001-18000037%Over 90000 individual willhave to pay 20797plus 37%
of entire over amount$180000 and above it45%Over 180000 individual hasto pay 54097 plus 45% ofover amount (Eslake, 2015)One example of an asset that is exempt from capital gains taxCapital gain tax does not be apply on depreciating assets because these assets are being usedfor taxable purposes. Business equipment’s and any kind of property which is on rent are exemptedfrom CGT.CGT event B1 s104-15 taxThis event states the use of assets and its enjoyment before title of that possessions getspassed to other entity. When two enterprises come into an agreement then CGT event B1 occur.This explains that right to use of any assets get pass to other organisation. It states that title of assetscan be passed to other entity at the time of agreement (Davis, 2016). Formula contained in s4-10(3) ITAA 1997According to s4- 10(3) formula of calculating income tax is:Income tax= (Income which is taxable*top tax rate)-offset [offset reduce income tax payable]Significance of the High Court case, FC of T v Day 2008 ATC 20-064 in the topic of deductionsThis case states about the salary deduction of employee which occurs when the employeefails to fulfil his responsibility towards the organization. Every employee should aware about theproper rules and regulations of the company1. The employee must aware about his duties and shouldbe available regular in the company and not to misuse the confidential information while in service.Difference between marginal rate of tax and average rate of taxMarginal tax ratesAverage rate taxIt measures the impacts of taxes on incentive to earn, spend, invest or save.It is an incremental tax which is paid on incremental income. It will increase as income rises.The highest tax rate in Australia is currently 45%.It measures household tax burden.It is a final amount of tax which is dividedby the total income. And the average income you pay in taxes will be less compare to marginal rate tax.The current rate for residential people is $18200 (Woellner and et.al., 2016).1FC of T v Day 2008 ATC 20-064
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