Taxation Law: Assessable Income, Fringe Benefits, Interest Income, CGT Assets

Running head: TAXATION LAW
Taxation Law
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1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Issues:.........................................................................................................................................2
Rule:...........................................................................................................................................2
Applications:..............................................................................................................................3
Conclusion:................................................................................................................................4
Answer to question 2:.................................................................................................................5
Answer to question 3:.................................................................................................................5
Issue:..........................................................................................................................................5
Rule:...........................................................................................................................................5
Applications:..............................................................................................................................6
Conclusion:................................................................................................................................6
Answer to question 4:.................................................................................................................7
Answer to A:..............................................................................................................................7
Answer to B:..............................................................................................................................7
Answer to C:..............................................................................................................................8
Reference List:.........................................................................................................................10

2TAXATION LAW
Answer to question 1:
Issues:
Are the monies that are received by the taxpayer for the exclusive media publications
assessable income under “section 6-5 of the ITAA 1997”?
Rule:
As stated under the “section 6-1 of the ITAA 1936” income derived from the personal
exertion or the income that is earned from the personal exertion represents the income that
includes wages, salaries, commissions, fees, bonuses, pensions, gratuities which is received
by the persons or the proceeds that is obtained by an individual for the business carried on.
According to the “section 6-1 of the ITAA 1997” an individual that derives the amount from
the personal exertion is held as income which is included in the taxable income as the
statutory or the ordinary income (Woellner et al. 2016).
Under “section 6-5 of the ITAA 1997” taxable income comprises of the income in
accordance with the ordinary concepts. Usually most of the income that comes in to the
taxpayer is held as ordinary income (Mumford 2017). The commissioner in “Scott v
Commissioner of Taxation (1935)” explained that receipts must be treated as income and
should be determined in agreement with the ordinary income concepts.
Payments that are received for media publications may or may not be held as the
taxable income. A reward relating to the provision of service is dependent facts of the
particular case (Pogge and Mehta 2016). This includes that the quantum of the payment that
is made to the taxpayer should be significant and should not merely be the nominal amount to
just cover the cost or inconvenience of the taxpayer. The taxpayer is required to provide the
service in order to receive the money.

3TAXATION LAW
To support the treatment of the payment as the income it can be noticed in the case of
“Federal Commissioner of Taxation v Brent (1971) ATC 4195” (Jones and Rhoades-
Catanach 2015). It was noticed in the case that the wife of the greatest robber of train was
held by the commissioner of taxation to have obtained the taxation income when she was
awarded with money of telling the story of her life to the newspaper publications.
In another example the decision that was made in the case of “Housden (Inspector of
Taxes v Marshall (1958)” the taxpayer in an agreement decided to make the experiences as
the Jockey available (Barkoczy 2016). This included the taxpayer’s photographs and the
newspaper articles cuttings. The amount that was received constituted reward for personal
service which is taxable under “section 6-5 of the ITAA 1997” as income from ordinary
concepts.
Income that are derived from the sale of the autobiographies are regarded as the
royalties’ income. According to the decision that was made in the case of “Hobbs v Hussy
(1942) TC 153)” the taxpayer who was apparently considered as one of the notorious
criminal received an amount of £1500 for the serial rights of the autobiographies that was
published in the newspaper (Christie 2015). Therefore, it can be stated that amount derived
constituted royalty income which was taxable under ordinary concept of “section 6-5 of the
ITAA 1997”.
Applications:
The case scenario that is obtained from the case study suggest that Hilary was the
famous mountain climber. On being approached by the local Newspaper she agreed to write
the book and the sell the interest to the newspaper company. After the services were rendered
the newspaper company paid Hilary with a sum of $10,000. Citing the reference of “Scott v
Commissioner of Taxation (1935)” the receipts must be treated as income and should be