Taxation: Calculation of Capital Gain and Fringe Benefits Tax Liability

Taxation 1
Running Head: Taxation
Taxation

Taxation 2
Executive Summary:
The taxation system in Australia has been subject to various rules and regulations while
concentrating on the various emerging reforms affecting thesystem. In order to assess the
correct taxable incomeof assesse use of theprovisions contained in Income Tax Assessment
Act 1997 and 1936 has been taken while identifying the mandatory requirements to be
fulfilled. The taxation problems will be associated with identifying the assessability of
various items concerned with the transactions entered into by the assesse during a particular
year. The technical announcements and various legislations that have been issued should be
taken into consideration while calculating the taxation liability of the assesse. The various
types of incomes forming part of the total income of assesse will be aggregated and has to be
analysed for the purpose of calculating correct amount of income as per the applicable
legislations.

Taxation 3
Table of Contents
Executive Summary:..................................................................................................................2
Introduction:...............................................................................................................................4
Question 1..................................................................................................................................5
Calculation of net capital gain or loss of the client for the current tax year ending on 30
June.........................................................................................................................................5
Question 2................................................................................................................................11
(a) FBT consequences and calculation of FBT Liability for the year ending 31 March 2018
..............................................................................................................................................11
(b) If Jasmine used $50,000 to purchase shares herself rather than lending to husband......15
Conclusion:..............................................................................................................................17
References:...............................................................................................................................18
Appendices:..............................................................................................................................19

Taxation 4
Introduction:
The task is carried out in the context of taxation theory, law and practice. This task manages
the ideas of capital gain and fringe benefits tax that identifies with the pay of taxpayers in
diverse scenarios in Australia. The capital gain tax has been figured for a customer who is an
individual taxpayer. The capital gain for various sorts of benefits, for example, land, shares,
antique bed, paintings, violin and so forth are incorporated into this task. These estimations
are made under various situations keeping in mind the end goal to apply an assortment of
ideas and matters of capital gain. The fringe benefits tax counts identify with the
organizationfewer than two unique situations. The task will be providing an overall learning
on the taxation theories.

Taxation 5
Question 1
Calculation of net capital gain or loss of the client for the current tax year ending on 30
June
At the time when a taxpayer sells a capital asset that is produced by him capital gain or loss
arises. Capital gain or loss is the measure of distinction between the sum paid on the securing
of the advantage and the sum got on the transfer of the benefit. A person is required to
incorporate the capital gain or loss in his Income Tax return and make good on the tax
obligation appropriate on such sum. The capital gain charge is a piece of Income tax. At the
point when a person brings about capital gain, it is included the aggregate pay and, in this
way, expands the taxation rate of the person. On the off chance that person acquires capital
loss, it can't be set off against another salary yet can be utilized to lessen the measure of
capital gain whether in present or future years (Harding, 2013). Every one of the advantages
procured after 20 September 1985 is qualified for CGT barring individual resources and
depreciable resources held for tax purposes. If there should arise an occurrence of individual
person capital gain rebate of the half on capital gain is accessible sue to which the capital
gain charge risk of the individual is decreased to half. This markdown is 33.33% for SMSF
and there is no such rebate for organizations. Anyway, indexation technique is likewise
accessible for resources obtained before 21 September 1999. The person can receive any
strategy which gives him the best expense results. Likewise, the rebate strategy and
indexation technique can't be connected to resources held for under a year prior to the deal
(Australian taxation office, 2018).
a.Block of vacant land
For this situation, the block of empty land was sold for $320,000 on 3 June of current year
which was gained on 1 January 2001 for $100,000. The acquirer likewise caused extra costs

Taxation 6
adding up to $20,000. The store was payable to the person on 3 January of one year from
now, however, the agreement was marked on 3 January of the current year (Buchan, Olesen,
and Carberry, 2013).
Capital gain tax is accounted for in the year in which the person goes into the agreement of
offer independent of whether the sum is gotten later. In this manner, the capital gain on a
block of empty land will be accounted for in the present year. The benefit was procured after
30 September 1999; consequently, indexation technique for ascertaining capital gain can't be
connected to the land. The customer is an individual; in this way, half rebate rate can be
connected to her capital gain. The capital gain on the offer of a block of empty land can be
figured as takes after:
Working notes:
1. The measure of repairs of $20,000 is added to the expense of procurement since the costs
were brought about for the securing of land and are perpetual in nature.
b. Antique bed
For this situation, the person bought an antique bed on 21 July 1986 and acquired expense of
changes adding up to $1500 on 29 October 1986. Amid the present duty year, the bed was
stolen and was esteemed for protection reason for a measure of $25,000.
Anyway,theinsurance agency paid the customer a measure of $11000 for the stolen bed under
her approach conditions (Burkhauser,Hahn, and Wilkins, 2015).