Tax Deductions and Self-Education Expenses

This assignment examines the tax deductibility of various expenses incurred by an individual named Manpreet. It delves into relevant income tax sections and legal precedents to determine whether expenses related to self-education, computers, printers, and mobile phones qualify for tax deductions. The analysis emphasizes the nexus between expenses and income-generating activities as a key factor in determining deductibility.

Running head: PRINCIPLES OF TAXATION LAW
Principles of Taxation law
University Name
Student Name
Authors’ Note

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Table of Contents
Solution to Question 1:...............................................................................................................2
Solution to Question (i):............................................................................................................2
Solution to Question 1(ii):..........................................................................................................3
Solution to Question 1(iii):.........................................................................................................3
Solution to Question 1(iv):.........................................................................................................4
Solution to Question 1(v):..........................................................................................................4
Solution to Question 1(vi):.........................................................................................................6
Solution to Question Vii.............................................................................................................6
Solution to Question viii............................................................................................................7
Solution to Question ix...............................................................................................................8
Solution to Question x................................................................................................................8
Solution to Question 2................................................................................................................8
References................................................................................................................................11

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Solution to Question 1:
Solution to Question (i):
The trustworthy client of airline is rewarded with Flight Point and Reward by aviation
corporations that is necessarily covered under the directives stipulated under the Taxation
Ruling of TR 1999/6. In essence, taxation ruling as mentioned under TR 1999/6 states that
points or incentives that are received by diverse clients from corporations operating in the
airline industry are generally not considered under taxation as type of income (Braithwaite,
2017). Nevertheless, fringe benefits might possibly be executed on specific points and
incentives in case if the following situations occur:-
- There is a specific association between the employer and the workers. Again, the
points or incentive from the flight are in actual fact accepted by employees taking into
consideration employment provision.
- The flight points otherwise rewards are offered to the worker for a certain specific
deal (McGuire et al., 2014).
The firm Web jet’s recurrent flier compensation received by the employee for work
associated travel shall be taxed neither as the Fringe Benefits nor as taxable earning.
Solution to Question 1(ii):
The individual from among the customer gets a payment for damage caused to the capital
asset during the period of delivering service to the customer. Then in that case, the amount
received as compensation for different damages caused cannot be evaluated under taxation.
However, this is taxable under the recipient (McGuire et al., 2014). The significant points that
can be taken into account include the following:

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- The assets/resources can be treated as a capital need to be vigorously used in the
business process of the recipient.
- The resources also need to be an asset that is essentially depreciable and anticipated
depreciation can be examined for the resources presented in the records (Dowling,
2014).
- The compensation amount accepted can be used for refurbishing parts of the resources
that are damaged
A certain amount of money is accepted for the caused damage by the Crane Hire
Company from the clientele. In essence, this is not to be regarded under cases of taxation
that is essentially not a taxable earning of the corporation provided that the above
mentioned conditions are satisfied (Austin & Wilson, 2015).
Solution to Question 1(iii):
According to the Australian Taxation Office, gifts received in kind else wise in cash can be
accepted by a particular individual but cannot be treated as an element of earning. This
particular element of earning accepted is neither a part of non-exempted earning nor non-
assessable earning. Essentially, small gift can be considered to be a certain category of a gift
that is eliminated during the period of enumeration of income tax of the individual (Austin &
Wilson, 2015). Nevertheless, in case of receipt of huge quantity of gifts that can transform
into money, then that particular sum can be taken into account in the process of analysis by
the recipient.
In this case, the supplier of alcohol has delivered the package of overseas holiday for free and
that is received by the executive of the night club. However, this can be taken into account in
the process of enumeration of income tax of the executive of the night club.

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Solution to Question 1(iv):
The amount of money acquired by the Canoe Club for purchasing supplementary canoes was
discovered to be an additional fund raised. However, this was necessarily returned to all the
members of the Canoe Club. However, the additional fund that was acquired cannot be taken
into account at the time of enumeration of the income tax. As such, this cannot be considered
whilst recording of earnings. This is because this finance cannot be necessarily reflected as
the earning in the alternative additional fund that is delivered by different members (Guenther
et al., 2016).
Solution to Question 1(v):
Gains that are accepted by different sports individuals can be covered Taxation Stipulations
TR 1999/171. However, according to the directives mentioned under this rule, any kind of
gains or else sums accepted by sports individuals can be considered as an earning that is
subject to taxation. Again, receipts cumulatively also becomes a part of total earnings
(Guenther et al., 2016). However, in the present situation, the total amount accepted by the
Australian football player from the television selling company can be considered as an
income that is taxable according to the general notion.
1

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Solution to Question 1(vi):
Fundamentally, reimbursement as well as allowance for construction employees can be
mentioned under the Taxation directives as mentioned under TR 95/22 (Badertscher et al.,
2013). According to the Taxation ruling mentioned under TR 95/22, employees working for
the construction along with building business are necessarily composed of the below
mentioned factors:
- Labours who are employed for building development
- Project Manager is engaged for the purpose of construction and development of
building in addition to many other things
- Apprentice, carpenter as well as trainee (Armstrong et al., 2016).
- place such as construction sites where different supervisors operate
The expenditure is incurred with respect to aptitude for building of the workers is clearly
illustrated as the compensation of the construction as well as building labourers along
with different allowance (Bauer, 2016).
Solution to Question Vii
During the period of enumeration of income tax, consequential expenditure incurred for short
time period considered from the context of an artiste can be sanctioned with deductions such
as:-
-Education of modules as well as software
-Course fee for the particular term that is necessarily of short term period for the arts
subject
-Recommended meals for a specific expense amount

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-Cost of travelling that is drawn in for the specific course (Braithwaite, 2017).
However, the expenses specified above can be considered for deductions. However, this can
be allowed in case if the expends are associated to the course of art administration and that
too necessarily for a short period of time. Again, expends that occur but does not associate
proportionately to the art management cannot be permitted for deduction for taxation
(McGuire et al., 2014). Therefore, expends in the present state of affairs can be set for the
deductions taking into consideration art management course that is a short term period course
and expends carried out remains within the above specified range (Dowling, 2014).
Solution to Question viii
According to the laws of taxation, expenditure for dresses offered by the employer is not
considered under the system of taxation. According to the Taxation Office of Australia art
execution by artists can be considered as permissible deduction under the laws of the taxation
(Austin & Wilson, 2015). As per the directives of taxation and grant permissible by
particularly Taxation Office of Australia, performing artists are the ones as mentioned
below:-
-Performing artist refers to musicians
-Performing artist refers to an actor
-Performing artist refers to a singer
-Performing artist refers to many other categories of artists
-Performing artists also refers to performers at circus as well as dancers (Bauer, 2016).

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However, in the present circumstances, expends can be related to dresses and make up of
different performing artists. Then that particular expends can be permitted as a deduction in
shaping the earnings that are taxable for performing artist (Armstrong et al., 2016).
Solution to Question ix
In general, travelling between home and place of work can be considered as travel for private
causes. Nevertheless, there are particular provisions for deductions and the ones that are
permissible assert for travelling expends. Again, in case if travelling is carried out only for
official purpose and in case of partly for private and partly for official reasons, then
expenditure components can be considered as travel only for official purpose. In this case,
deductions that are permissible can be properly mentioned. However, in the present
condition, it might better be comprehended that the travelling was carried out only for work
purpose (Badertscher et al., 2013). Again, the expenditure that was incurred can be
mentioned for deductions of tax determination.
Solution to Question x
In essence expends related to travelling between yet another employer and the particular
employer. Nonetheless, in the current state of affairs, costs borne for the purpose of travelling
between the two different employers can be taken into account else wise considered as
permissible deduction (McGuire et al., 2014). However, this is mainly because claims for
deductions cannot be claimed for travelling between diverse employers.
Solution to Question 2
In a bid to verify the liability of tax of a specific individual, it is essential to settle on whether
the specific individual is a resident or else a foreign resident for taxation purpose. Essentially,
the provision of the law mentions that a particular overseas student who has enrolled in

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Australia for a period of over and above six months can be regarded as a resident for taxation
purpose. Particularly, in the present scenario, it can be observed that Manpreet can be
considered as an Australian resident for taxation purpose since the student is registered for a
particular course in excess of six months in any Australian University. Additionally, this
individual also operates in a specific office on a part time basis and receives a compensation
of around $45000. This individual also had to acquire expenses for educational purpose and
this is necessarily not permissible as deduction. Again, expends for self-education that is
around $18000 cannot be permitted as deduction. Particularly, the law mentions that a
particular individual can claim expends associated to self-education only in case if the study
is associated to work otherwise if the individual has accepted scholarship of bond that is
taxable as per law (Gallemore & Labro, 2015). Essentially, the course adopted for the
purpose of self education need to have favourable interest with the present employment. In
this case, it can be mentioned that the course need to satisfy the following conditions:-
- Enhance the requisite skills that is required by a specific individual in the present
place of work
- The course can assist in the process of augmenting the overall earnings from the
present employment (Dowling, 2014).
Thus, it can be hereby mentioned that a particular individual need not claim for different
expends associated to self-education that does not have any association with present state of
employment.
As per the section 8-1 mentioned particularly under Income Tax Assessment presents that an
expenditure is permitted as deduction in case if there is ample association between expends
and income generating actions. Again, expends that are private or domestic in nature is not
permitted as deduction. Furthermore, a case presented on Ronpibon Tin NL v. FC of

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T (1949) backs the specific standpoint. This necessarily mentions that a particular outgoing
can only be permitted as deduction of tax in case if the outgoing results in producing taxable
earning (Braithwaite, 2017). However, there expends that are incurred for the purpose of self-
education and cannot be permitted as a deduction.
In essence, there are also expends that are sustained by Manpreet on particularly computers
as well as printers. Again, there are expends that are incurred for mobile phones that are in
turn utilized for work associated purposes. Expends are normally deductible in case if there is
adequate nexus between expends and income earning capability (McGuire et al., 2014).
Again, obligatory character of expend is that it need not be associated to work but for
domestic purposes. Again, the expenditure also can be incidental or else pertinent for
generation of earnings. In addition to this, case of FC of T v. M I Roberts 92 ATC 4787
asserts that the court has permitted nine managers to subtract expends associated to MBA
according to the standard mentioned in (Maddlena Braithwaite, 2017). Thus, it can be said
that he can aver permissible deduction for principally the mobile phone. The enumeration is
hereby mentioned below:

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References
Armstrong, C., Glaeser, S., & Kepler, J. D. (2016). Strategic reactions in corporate tax
avoidance.
Austin, C. R., & Wilson, R. J. (2015). Are Reputational Costs a Determinant of Tax
Avoidance?.
Badertscher, B. A., Katz, S. P., & Rego, S. O. (2013). The separation of ownership and
control and corporate tax avoidance. Journal of Accounting and Economics, 56(2), 228-250.
Bauer, A. M. (2016). Tax avoidance and the implications of weak internal
controls. Contemporary Accounting Research, 33(2), 449-486.
Braithwaite, V. (Ed.). (2017). Taxing democracy: Understanding tax avoidance and evasion.
Routledge.
Dowling, G. R. (2014). The curious case of corporate tax avoidance: Is it socially
irresponsible?. Journal of Business Ethics, 124(1), 173-184.
Gallemore, J., & Labro, E. (2015). The importance of the internal information environment
for tax avoidance. Journal of Accounting and Economics, 60(1), 149-167.
Guenther, D. A., Matsunaga, S. R., & Williams, B. M. (2016). Is tax avoidance related to
firm risk?. The Accounting Review, 92(1), 115-136.
McGuire, S. T., Wang, D., & Wilson, R. J. (2014). Dual class ownership and tax
avoidance. The Accounting Review, 89(4), 1487-1516.

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