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Income Tax Assessment Act 1997 | Taxation Law Assignment

   

Added on  2020-04-01

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Running head: TAXATION LAWTaxation LawName of the Student: Name of the University:Author’s Note:

1TAXATION LAWTable of ContentsAnswer to Question No 1...........................................................................................................2Answer to Question No 2...........................................................................................................6Answer to Question No 3...........................................................................................................8Answer to Question No 4.........................................................................................................10Reference List and Bibliography.............................................................................................12

2TAXATION LAWAnswer to Question No 1Issue IFrom the active situation of transporting a machinery from one location to the other, the expenses and the cost that the company may incur can be taken as a deductions that are non-allowable in accordance to the “Section 8-1 of the ITAA 1997”. The laws that are applicable to this issue are “Section 8-1 of the ITAA 1997“British Insulated and Helsby Cables” The use of the laws can be applicable as it is pertinent from the current scenario that transporting the machinery from one location to the other requires the use of a certain cost and it can be explained that no tolerable deductions would be allowable with respect to “Section 8-1 of the ITAA 1997” . In order to compute the depreciation, transporting the machinery into a new location can be explained that it associates cost that finally leads to the rise in the machinery cost. It has been indicated in the “British Insulated & Helsby Cables” various kinds of expenses and cost that is acquired during the time of the movement represents a benefit that is beneficial in nature for the firm by transporting the machine to the new location. With respect to the “Taxation Ruling TD 93/126” fitting of the machine and initiating the functions of the organization leads to the involvement of the cost for the shiftingof the machine in a new location and sustainably creating a section of the profit1. It must be cited that the associated cost in shifting the machine to the new arena may not be regarded as the deductions that are allowable. 1Barkoczy, Stephen. "Foundations of Taxation Law 2016."OUP Catalogue (2016).

3TAXATION LAWWith regards to the “Section 8-1 of the ITAA 1997”, it can be said that expense of shifting the machine will not be granted as substructions as it has been considered as a capitalexpenditure. Issue IIThis problem brings forth the query about whether asset revaluation impacts insurancecoverage, which would form a segment of the permissible deductions with respect to “Section 8-1 of ITAA 1997”.The laws that applicable to this scenario involve:“Section 8-1 of the ITAA 1997”It can be considered that the cost that is generated from the asset revaluation in order to have an impact on the insurance coverage may be regarded as the deductions that are permissible and this is connected directly with the fixed assets. During the time of evaluating the deductible characteristics of the expenditure, it is mandatory to ensure such occurrence of the expenditure during the asset revaluation outcomes within the earning producing capacity or it can be simply incurred to safeguard the asset2. If this condition provides a conditional benefit to the firm or it is in nature recurring then it would be granted as permissible deductions provided in “Section 8-1 of the ITAA 1997”.Hence, it can be explained that the insurance coverage cost will be considered as subtractions that would be allowable in “Section 8-1 of the ITAA 1997” as it has a persistent element of the expenditure. 2Bell, Stephen, and Andrew Hindmoor. "The structural power of business and the power of ideas: The strange case of the Australian mining tax."New Political Economy19, no. 3 (2014): 470-486.

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