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TAX TABLE OF CONTENT.

   

Added on  2023-03-30

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TAX
TABLE OF CONTENT

S
QUESTION 1.............................................................................................................................1
PART A......................................................................................................................................1
Advise the deductibility of the lump sum payments..............................................................1
i)..............................................................................................................................................1
ii).............................................................................................................................................1
iii)...........................................................................................................................................1
iv)............................................................................................................................................2
PART B......................................................................................................................................2
i)..............................................................................................................................................2
ii).............................................................................................................................................2
iii)...........................................................................................................................................2
iv)............................................................................................................................................2
v).............................................................................................................................................3
vi)............................................................................................................................................3
QUESTION 2.............................................................................................................................3
PART A......................................................................................................................................3
i)..............................................................................................................................................3
ii).............................................................................................................................................3
iii)...........................................................................................................................................4
iv)............................................................................................................................................4
v).............................................................................................................................................4
vi)............................................................................................................................................4
PART B......................................................................................................................................4
Advise IPL about the tax treatment of the amounts including discussion of key tax
accounting principles, legislations ad case laws.....................................................................4
i)..............................................................................................................................................4
ii).............................................................................................................................................5
iii)...........................................................................................................................................5
iv)............................................................................................................................................6
v).............................................................................................................................................6
QUESTION 3.............................................................................................................................6
Advise BOB and Linda of the tax liabilities..........................................................................6

i)..............................................................................................................................................7
ii).............................................................................................................................................7
iii)...........................................................................................................................................7
iv)............................................................................................................................................7
v).............................................................................................................................................7
vi)............................................................................................................................................8
vii)...........................................................................................................................................8
viii).........................................................................................................................................8
ix)............................................................................................................................................8
x).............................................................................................................................................8
QUESTION 4.............................................................................................................................8
PART A......................................................................................................................................8
Explain relevant parties using tax legislations and cases the tax payable under this trust
arrangement............................................................................................................................8
i)..............................................................................................................................................8
ii).............................................................................................................................................9
iii)...........................................................................................................................................9
iv)............................................................................................................................................9
v).............................................................................................................................................9
vi)..........................................................................................................................................10
PART B....................................................................................................................................10
Explain to bob the trustee of BLF family trust with reference to legislation and case law..10
i)............................................................................................................................................10
ii)...........................................................................................................................................10
iii).........................................................................................................................................10
iv)..........................................................................................................................................10
v)...........................................................................................................................................10
vi)..........................................................................................................................................10
QUESTION 5...........................................................................................................................11
PART A....................................................................................................................................11
Advise Maddox meats pty ltd about the GST implications showing calculations and
legislations............................................................................................................................11
i)............................................................................................................................................11
ii)...........................................................................................................................................11
3

iii).........................................................................................................................................11
iv)..........................................................................................................................................11
v)...........................................................................................................................................12
vi)..........................................................................................................................................12
vii).........................................................................................................................................12
viii).......................................................................................................................................12
ix)..........................................................................................................................................12
PART B....................................................................................................................................12
Explain using legislation ad case law...................................................................................12
ii)...........................................................................................................................................12
a)...........................................................................................................................................12
b)...........................................................................................................................................12
c)...........................................................................................................................................13
iii).........................................................................................................................................13
QUESTION 6...........................................................................................................................13
Calculate tax payable/refundable for each shareholder........................................................13
REFERENCES.........................................................................................................................14
4

QUESTION 1
PART A
Advise the deductibility of the lump sum payments
i)
Issue- To know that non-deductible capital expense relates to the business structure or not
Law- Section 8-1 of ITAA
Application-The person cannot deduct the loss from its income if they satisfy the given
condition that a loss arises of a nature to the capital and a specific loss arises from an activity
that is basically associated with private as well as domestic in nature.
Conclusion-A lumps sum payment of $10000 falls under the first category where this
payment made for producing income by selling the Italian brand olive oil, and this is not a
non-deducible capital expense.
ii)
Issue- The deductibility of the capital expenses and revenue expenses
Law- nature of expenses under ITAA
Application-The deductibility of the capital expenses and revenue expenses determine by
assessing the nature of two of the expenditures. The capital expense is related to the assets
held for a long-time period in an entity.
Conclusion- The revenue expense belongs to the business processes is incurred for
generating the revenues.
iii)
Issue- Deductibility of the lump payment
Law- The deductibility of the lump payment depends on some of the conditions which need
to consider in assessing the deduction of all the lump sum payments are given as below:
The benefit of one party while making the payment
Payment made for the future contract
1

Application- The expenses incurred by Dixon J set and published in the sun newspapers
contain one of a feature of the lump sum payment that expense incurred for getting the
benefit.
Conclusion- It is concluded that the lump sum payment belongs to the benefit received by
Dixon J
iv)
Issue- Determine the nature of the transaction by BP Australia
Law-
As per “Income tax assessment act 1997”, the basic of the capital expenditure is
associated with the expense which meets the below mention conditions.
Application-In the present scenario, the overall expenditure which is sustained by BP
Australia for selling petrol in the petrol station was earlier recognized as revenue is a capital
expenditure.
Conclusion- It is summarized that this transaction is consider as capital expenditure and not
revenue.
PART B
i)
Issue- To determine the deductibility of repair expenses
Law- Repair Expenses under section 25-10
Application- Repair expenses covered under section 25-10 should be of capital nature, which
is related to the repairing and the improvement of building by adding new material.
Conclusion- The wooden floor will satisfy the repair and its definition under the repairs of
section 25-10
ii)
Issue- Judge the nature of the assets under division 40
Law- Division 40 denotes the capital works deduction, which shows the production of
income that comprises of building
2

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