Taxation Law

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Issues:.........................................................................................................................................2
Rule:...........................................................................................................................................2
Application:................................................................................................................................3
Conclusion:................................................................................................................................5
References:.................................................................................................................................6

TAXATION LAW2
Answer to question 1:
Issues:
a. Is the taxpayer held assessable under the ordinary concepts of “section 6-5, ITAA
1997” for income derived from the employment?
b. Is the taxpayer allowed to obtained deduction for the expenditure occurred in
producing taxable income under positive limbs of “section 8-1, ITAA 1997”?
Rule:
As per “section 6, ITAA 1936” receipts derived by taxpayer from employment and
offering personal services are subjected to tax liabilities for the employee. Ordinary is better
understood as income as per the ordinary concepts and it is taxable under the “section 6-5,
ITAA 1997”1. The high court in “Scott v CT (1935)” interpreted the word income in respect
of the ordinary concept and use of mankind.
In “Moore v Griffiths (1972)” the court explained that simple prize winning should
not be treated as income2. However, prize winnings only amounts to income when it is related
with a person’s revenue producing activities. In “FCT v Stone (2005)” the taxpayer was held
assessable for the prize money because she was carrying the business of professional athlete
and the money was income.
“Section 102-5, ITAA 1997” requires the taxpayers to include in their assessable
income the net amount of capital gains that is made during the year. While the capital loss are
1 Krever, Richard E, Australian Taxation Law Cases 2014
2 Kenny, Paul, Australian Tax 2013 (LexisNexis Butterworths, 2013)