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Taxation laws : Solved Assignment PDF

   

Added on  2021-06-18

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Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID

TAXATION LAW1Table of ContentsAnswer to question 1:.................................................................................................................2Issue:......................................................................................................................................2Laws:......................................................................................................................................2Application:............................................................................................................................2Conclusion:............................................................................................................................4Answer to question 2:.................................................................................................................5Issue:......................................................................................................................................5Laws:......................................................................................................................................5Applications:..........................................................................................................................5Conclusion:............................................................................................................................7Answer to question 3:.................................................................................................................7Issue:......................................................................................................................................7Laws:......................................................................................................................................7Application:............................................................................................................................7Conclusion:............................................................................................................................9Reference List:.........................................................................................................................10

TAXATION LAW2Answer to question 1: Issue: Is the taxpayer will be liable for assessment relating to the sum received from thepublisher for the publisher for the reward for service as income under the ordinary concept ofsection 6-5 of the ITAA 1997? Laws: a.“Section 6-5 of the Income Tax Assessment Act 1997”b.“Scott v Commissioner of Taxation (1935)” c.“Brent v Federal Commissioner of Taxation (1971) ATC 4195”d.“Federal Commissioner of Taxation v Holmes (1995) ATC 4476”Application: According to the section 6 of the Income Tax Assessment Act 1936 income obtainedfrom the personal exertion comprises of the amounts in the form of wages, salaries,commissions, fees, gratuities, pension, bonus or proceeds obtained from the business carriedon by the taxpayer. According to the “section 6-5 of the Income Tax Assessment Act 1997”defines the expression of the term ordinary income as the income that is obtained from themost of the sources (Barkoczy, 2014). The court of law in the case of “Scott v Commissionerof Taxation (1935)” explained that the judicial concept of the expression ordinary income asthe income that are determined based ordinary concepts or the use of mankind (Brokelind,2014). As understood in the present circumstances of Jenny an amount of $1 million wasoffered by Jack a publisher who was interested in publishing the life story of Herny, thedeceased husband of Jenny. The publisher approached her with an advance of $500,000 sothat he can conduct an interview with Jenny.

TAXATION LAW3According to the definition stated under the “section 6-5 of the ITAA 1997” an itemthat possess the nature of income and same is derived when it comes home to the taxpayer.The “section 6-5 of the ITAA 1997” explains that an item possessing the character of incomewhich has been derived will be held as income up to the amount of its realisable value(Coleman & Sadiq 2013). The character of the income should be derived in all thecircumstances based on its derivation by the taxpayer. The court of law in the event of “Brent v Federal Commissioner of Taxation (1971)ATC 4195” provided its judgement by explaining that the payment that is received by thewife of the train robber was granted with the exclusive right of narrating the story of herhusband to publish the life story would be held as taxable income (Grange et al., 2014). Thetaxpayer lend her name to the story that was written by the journalist and the receipt ofamount from such exclusive right constitute income under section 6-5 of the ITAA 1997 thatattracted tax liability. Simultaneously in the case of “Federal Commissioner of Taxation v Holmes (1995)ATC 4476” the court of law held that the receipts relating to the salvage reward payment tothe marine engineer was regarded as reward for service and the same was included in thetaxable income (James, 2014). Receipts that are associated to sponsorship money from the commercial firms andreceipts associated to the appearance fees relating to attendance in function might provide anexample of receipts related to services but are not held as employment (Kenny, 2013).Likewise in the situation of Jenny the receipts obtained for narrating the story of her husbandduring interview is held as reward for services but does not constitute employment. Thereceipt by Jenny for making herself available for interview would be liable for assessment. In

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