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Taxation Law Name of the Student Name of the University

   

Added on  2019-11-12

12 Pages1786 Words370 Views
Running head: TAXATION LAWTaxation LawName of the StudentName of the StudentName of the University
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1TAXATION LAWTable of ContentsAnswer to Question 1......................................................................................................................2Requirement I..............................................................................................................................2Requirement II.............................................................................................................................2Requirement III............................................................................................................................3Requirement IV...........................................................................................................................4Answer to Question 2......................................................................................................................4Answer to Question 3......................................................................................................................7Answer to Question 4......................................................................................................................8References......................................................................................................................................10
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2TAXATION LAWAnswer to Question 1Requirement IIssue: The main issue is allowable deduction under section 8-1 of the ITAA 1997 regarding thecost incurred while moving machinery to a new site.Legislation: The required legislations are:Section 8-1 of the Income Tax Assessment Act 1997British Insulated & Helsby CablesApplication: As per section 8-1 of the ITAA 1997,the incurred cost while moving themachinery to a new site is capital expenditure and is not eligible for allowable deduction(O'Connell, Martin and Chia 2013). Moreover, cost of the assets increased because ofdepreciation. The cost of moving the machinery is for small changes and Section 8-1 of theIncome Tax Assessment Act 1997 states that it will be allowable for taxable deduction. As perthe case of British Insulated & Helsby Cables, cost of transportation implies enhanced benefitsfor businesses (Tiley and Loutzenhiser 2012). Thus, in the provided case, moving cost is capitalexpenditure and is subjected to non-permissible deduction.Conclusion: According to Section 8-1 of the Income Tax Assessment Act 1997, the movingcost of the machinery is subject to non-permissible deduction.Requirement IIIssue: The major issue is about permissible deduction as per section 8-1 of the Income TaxAssessment Act 1997 regarding revaluation of assets that can affect the insurance cover.
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3TAXATION LAWLegislations: The required legislation is Section 8-1 of the Income Tax Assessment Act 1997.Application: As per the provided situation, the particular expenditure has association with assets.Thus, it is needed to determine that whether the expenditure has occurred at the time of revaluingthe assets and the revenue have increased or not. In case there is benefit of the company out ofthe revaluation, then it is subject to allowable deduction as per section 8-1 of the Income TaxAssessment Act 1997. In the provided situation, due to the repetitive nature of occurrence of theexpenditure, it will be subject to permissible deduction according to section 8-1 (Cui 2013). Conclusion: It can be concluded that the cost incurred for insurance cover is subject to allowablededuction for recurring in nature as per section 8-1 of the Income Tax Assessment Act 1997.Requirement IIIIssue: The issue is about allowable deduction as per section 8-1 of the Income Tax AssessmentAct 1997 regarding legal expenses to oppose the petition of winding up.Legislation: The required legislations are as below:Section 8-1 of the Income Tax Assessment Act 1997FC of T v Snowden and Wilson Pty Ltd(1958) 99 CLR 431)Application: According to section 8-1 of the Income Tax Assessment Act 1997, winding up costis related to the business operations and thus, subject to permissible deduction. Moreover,taxation ruling of ID 2004/367 states that legal costs are subject to deduction in case the cost isoccurred for business purposes (Nordhausen and Howells 2016). As per the verdict in FC of T vSnowden and Wilson Pty Ltd(1958), the unusual expenditures of the businesses are not subject
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