Taxation Law: City Sky Co and Emma Case Study Analysis

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

TAXATION LAW
1
Table of Contents
Question 1: City Sky Co case study.............................................................................2
Answer to Question 2: Emma Case Study...................................................................3
Evaluating the Capital gain tax (CGT) of Emma’s by analysing the specific laws laid
down by the Australian Tax Organisation (ATO):.........................................................3
References:..................................................................................................................6

TAXATION LAW
2
Question 1: City Sky Co case study
The City Sky Co case is evaluated for understanding the level of CGT credit
input that the organisation could use from their operations. In addition, relevant case
analysis has been conducted for detecting the GST credit input that can be claimed
by City Sky Co for the transactions conducting during the financial year. The case
study analysis of the organisation has relatively indicated that the company engages
in buying relevant plots and developing different departments for their sales revenue.
The further analysis of the case study has specified that the company has bought a
plot of land, which they would use for the development of 15 apartments (Ato.gov.au
2019). In addition, the organisation has also utilised services of a lawyer for the
development purposes, which cost around $33,000. Thus, the company directly aims
to utilise GST input credit to get all the rebate that has been paid by the organisation
for claiming the GST on services, purchase of land and construction cost.
GST input credit is one of the repeat that is allowed by the Australian tax
organisation to be companies which deal in goods and services. Therefore, any kind
of GST that has been paid by the organisations is relatively repaid to them, as tax
rebate, which can be detected from their overall tax payment for the financial year
(Ato.gov.au 2019). The companies have to either maintain adequate GST paid and
GST claims balances to determine the overall GST balance, that is due or need to
be paid by the government to the organisation. As per the GST law, it could be
identified that tax credit has relevant claims that is relatively challenged in a court of
law by many organisations. Some of the claims for GST credit are depicted as
follows.
 Bryxl Pty Ltd as Trustee for the Kypu Trust and Commissioner of Taxation [2015]
AATA 89 (Austlii.edu.au 2019)
 Rod Mathieson Truck Hire Pty Ltd as trustee for the Mathieson Family Trust and
Commissioner of Taxation [2013] AATA 496 (Austlii.edu.au 2019)
 ECC Southbank Pty Ltd as trustee for Nest Southbank Unit Trust v
Commissioner of Taxation [2012] FCA 795 (Austlii.edu.au 2019)
 Wynnum Holdings No 1 Pty Ltd and Commissioner of Taxation [2011] AATA 296
(Austlii.edu.au 2019)
The above cases that was highlighted regarding the GST credit claims has
been dismissed by the commission of taxation, as it did not cover the GST law
relevant GST claims could be credited to the organisation. The above companies are
relatively charged the tax commissioner with the claim for providing the GST rebate
on the overall GST paid for the development expenses that was conducted on a plot
of land (Ato.gov.au 2019). The cases mainly highlighted the overall loopholes that
was being evaluated by the organisations to get there is GST clearance for the
development of a particular land. However, the GST commissioner directly indicated
that as per the taxation law the overall claims of the GST credit is nullified, as the
organisation will not be credited with any kind of GST that has been paid on a
developing or developed land.
The case study has mainly highlighted that the organisation will not be
credited with any kind of GST rebate for the purchase of land and the development
cost of the 15 apartments. The case analysis directly indicates that the overall
purchase of land and expense on the development is under the GST black credit
clause, which directly indicates that only goods and services can be claimed as GST
input credit tax where land and the development expense is not considered as GST