Assigment on Taxation (pdf)

Added on - 21 Feb 2021

  • 9

    Pages

  • 2439

    Words

  • 5

    Views

  • 0

    Downloads

Trusted by +2 million users,
assist thousands of students everyday
Showing pages 1 to 3 of 9 pages
TAXATION
Table of ContentsINTRODUCTION...........................................................................................................................3QUESTION 1...................................................................................................................................3Capital Gain Tax Consequences.................................................................................................3QUESTION 2...................................................................................................................................5Identifying transactions generating Income from Personal Exertion..........................................5Treatment of Rewards Received if Book was written otherwise................................................6QUESTION 3...................................................................................................................................7Impact of Arrangement on Income of Patrick.............................................................................7CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................9
INTRODUCTIONTaxation is a method of revenue collection which is implemented by National, State orTerritorial governments all around the world (Evans, Minas and Lim, 2015). In Australia, thisactivity is carried out by ATO, the Australian Taxation Office. This report aims to look atdifferent case scenarios in the light of various statutory tax as well as case laws. The report isdivided into three parts viz. Question One, Two and Three, that mainly discuss about CapitalGain Tax Consequences and their treatment for taxation purposes, income generated frompersonal exertion as well as impact of loan arrangements made between the family members onthe assessable income of lender.QUESTION 1Capital Gain Tax ConsequencesACapital Gain Tax (CGT) Eventis one which results in either Capital Gain or Loss onpart of the individual (Types of CGT Event,2019). It may relate either Purchase of an asset or itsdisposal. There are many that have been identified under this category like loss or destruction ofa class or a single unit of an asset. It is important to note that there are some exemptions to thisrule. These exclude personal properties of the buyer or seller such as main residence,collectables, car or motorcycle or those which have been acquired on or before September 20,1985.A collectable is defined as an asset which is mainly used for personal purposes. Theseinclude paintings, sculptures, jewellery, drawings and pictures among others. In case of anyinterest, debt, option and/or right arises either on acquisition or disposition of such an asset, itcan be termed as a collectable too. Any Capital Gain or Loss generated through Disposal ofAsset, specifically Collectables [CGT Event A1], is disregarded. This statement holds true underthe following conditions:Acquisition Cost of such a CGT Asset is less than $500;Interest Acquired in the collectable is less than $500 on or before December 16, 1995;Interest Acquired in the collectable when its market value did not exceed $500.Whereas any Capital Loss generated is treated as a reduction from the total capital gainsamount which is acquired from the sale of other collectables. Also, if an asset is disposed of
desklib-logo
You’re reading a preview
Preview Documents

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Download This Document