Taxation Consequences of Yearly Transactions for Amber in 2018

Running head: TAX
Tax
Name of the Student:
Name of the University:
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1TAX
Table of Contents
Issue............................................................................................................................................2
Laws...........................................................................................................................................2
Application:................................................................................................................................4
Conclusion:................................................................................................................................5
Reference....................................................................................................................................6

2TAX
Issue
In this report, the yearly transaction of Amber for the year 2018 will be discussed and
the tax consequences for the transactions will be evaluated in accordance with the legislations
stated in the Income Tax Assessment Act 1997. It is required to identify which of these
transactions can be regarded as capital gains taxation and the important sections of ITAA will
be referred in order to evaluate the statement.
Laws
In accordance with the section 102-5 of ITAA 1997, the assessable incomes gained by
an individual needs to be recorded in order to measure the total tax payable by the individual.
The income needs to be incurred as a capital gain in order to be considered as a taxable
income. The capital gains taxation measurements determine whether the income gained by
the individual will be considered as a profit or loss (Sharkey, 2015). In order to identify the
capital gains or loss, section 102-20 needs to be considered in order to evaluate the CGT
event A1. Another important section to dispose the CGT event in the incurred income is the
section 104-10 of ITAA 1997.
In order to evaluate the CGT event C2 which is particularly associated with the
intangible assets, section 104-25 needs to be considered. This section determines the end or
expiry of an intangible assets or the end of ownership of the assets. In order to calculate the
goodwill associated with the assets, it is needed to consider the CGT event C1. But this CGT
measurement can only occur when the business is permanently ceased or the lifespan of the
asset is permanently ended. In order to evaluate the disposal over the goodwill or the interest
over the goodwill, the taxation ruling 1999/16 needs to be considered. The CGT event C1
cannot be considered as a temporary closure in case of the business is permanently ceased
(Becker et al., 2015).
Some other case laws that are required to evaluate the taxation consequences of
Amber, In the case of FCT v Murry, the citation states that the goodwill is considered as
evidence where the assets are capable of generating the revenue. The asset is regarded as an
intangible if such conditions prevail in the operation of the business. For another instance, the
goodwill must be regarded as a CGT assets as per the guideline is stated in the section 108-5