Taxation Law Report Question Answer 2022

Running head: TAXATION LAW
Taxation Law
Name of the University
Name of the Student
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................6
Answer to question 3:.................................................................................................................6
Answer to question 4:.................................................................................................................8
References:.................................................................................................................................9

TAXATION LAW2
Answer to question 1:
Computation of Income Tax Liability
In the books of Piper
For the year ended 2018/19
Particulars
Amount
($) Amount ($)
Assessable Income
Income from Salaries - BU University
$
25,000
Salaries from law firm
$
90,000
Foreign sourced interest on fixed deposit (R5000 ZAR = A$
488)
$
4,392
Total Assessable income
$
1,19,392
Allowable Deductions
Purchase of Portable Printer (2/3 deductible)
$
94
Self-Education course fee
$
5,000
Travel Expenses
$
672
Fees for practicing certificate
$
1,200
Books
$
600
Total Allowable Deductions
$
7,566
Total Taxable Income
$
1,11,826
Tax on Taxable Income
$
28,873
Add: Medicare Levy
$
2,237
Less: Foreign interest tax offset (withheld from interest R8100
(ZAR))
$
791
Less: PayG Withheld from Law Firm
$
20,747
Less: PayG Withheld from BU
$
8,125
Less: LMITO
$
425
Add: Excess of private insurance rebate
$
1,000

TAXATION LAW3
Total Tax Payable
$
2,022
As per “section 6, ITAA 1936” receiving of any amount from the occupation and
rendering any individual services will attract income tax liability for the wage earner or may
be require the employer to pay the fringe benefit tax (Barkoczy 2016). There should always
be a relation for the income that is received as the outcome of personal services delivered by
the taxpayer. Regularly, the earnings from the individual services are held as ordinary
revenue and it is taxable within “sec 6-5, ITAA 1997”. The court of law in “Dean v FCT
(1997)” alleged that the retaining imbursement that was paid to staffs to remain employed for
twelve months was held as income.
Piper reports the receipt of salary from her part-time occupation as sessional lecturer
at Baccalaureate University. The annual salary received by Piper stands $25,000. Referring
“sec 6 ITAA 1936”, the salary received by Piper is an earnings from individual efforts
(Braithwaite 2017). Citing “Dean v FCT (1997)” the salary will be taxable as ordinary
income under “sec 6-5, ITAA 1997”.
Gifts that are received out of personal qualities are not viewed as usual earnings under
“sec 6-5, ITAA 1997”. It is necessary to ascertain difference between where the gift is made
and there is a necessary occupational or commercial relation. The judgement denoted in
“Scott v FCT (1966)” held that any receipt from the personal relationship between the parties
cannot be termed as income (Sadiq 2019). Likewise, Piper also received a Woolworths gift
voucher of $500 in respect to the free advice given will not be apprehended as ordinary
earnings. Citing the factual situation of “Scott v FCT (1966)” the voucher that is received by
Piper lacks commercial connection and hence cannot be chargeable as assessable proceeds.