Taxation Law Answer to Question Assignment
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Added on 2019-11-20
Taxation Law Answer to Question Assignment
Added on 2019-11-20
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Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthor’s Note
1TAXATION LAWTable of ContentsAnswer to Question 1......................................................................................................................2Requirement 1..............................................................................................................................2Requirement 2..............................................................................................................................3Requirement 3..............................................................................................................................4Requirement 4..............................................................................................................................5Answer to Question 2......................................................................................................................6Answer to Question 3....................................................................................................................10Answer to Question 4....................................................................................................................12References......................................................................................................................................13
2TAXATION LAWAnswer to Question 1Requirement 1Issue: The issue in this case deals with the moving cost of machinery to a new site as permissiblededuction under Section 8-1 of the Income Tax Assessment Act 1997. Regulations: The needed legislations are discussed below:a.Section 8-1 of the Income Tax Assessment Act 1997b.British Insulated & Helsby CablesApplication: As per Section8-1 of the Income Tax Assessment Act 1997, the generated costwhile moving the machinery to a new site is capital expenditure1. In this case, the chargeddepreciation increases the cost of the machinery while moving to a new site. As the cost incurredfrom moving the machinery to a new site is due to a small change, it will be allowable fordeduction under Section8-1 of the Income Tax Assessment Act 1997. In this case, the mainreason for allowable deduction is that the cost is incurred for the carrying on the daily businessactivities2.The case of British Insulated & Helsby Cables involves the fact that there was anincrease in business benefits due to the shift of shift of depreciable assets in the business1Oats, Lynne, ed.Taxation: A fieldwork research handbook. Routledge, 2012.2Devos, Ken. "The impact of tax professionals upon the compliance behaviour of Australianindividual taxpayers."Revenue Law Journal22.1 (2012): 31.
3TAXATION LAWpremises3. As per Taxation Ruling of TD 93/126, the cost of installing the machinery andstarting the business needs to be treated as revenue as it increases the business benefits. Thus, incase of the provided situation, the cost to move the machinery will be treated as capitalexpenditure and is allowed for permissible deduction4. Conclusion: From the above discussion, it can be concluded that the cost to move the machineryis capital expenses in nature and will be subject to allowable deduction as per Section 8-1 of theIncome Tax Assessment Act 1997.Requirement 2Issue: The issue covers the topic to affect the insurance cover by the revaluation of assets willsubject to allowable deduction under Section 8-1 of the Income Tax Assessment Act 1997.Regulations: The needed legislation is Section 8-1 of the Income Tax Assessment Act 1997.Application: The provided situation proves that the expenditure has association with the fixedcost5. Thus, in the process to determine the amount of deduction, it is required to determine thefact that whether the mentioned expenditure has generated out of the asset revaluation thatincreases the revenue of the company or the expenditure has incurred for the protection of theasset. In case protecting the assets is repetitive in nature, then it will be subject to allowable3Yussof, Salwa Hana, Khadijah Isa, and Raihana Mohdali. "An analysis of the gap betweenaccounting depreciation and tax capital allowance in Malaysia."Procedia-social and behavioralsciences164 (2014): 351-357.4Barkoczy, Stephen. "Foundations of Taxation Law 2016."OUP Catalogue(2016).5Langton, Marcia, and Judy Longbottom, eds.Community futures, legal architecture:foundations for Indigenous peoples in the global mining boom. Routledge, 2012.
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