Taxation - Desklib

Running head: TAXATION
Taxation
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Name of the University
Author Note

TAXATION1
1)
a) The exact point of time when it can be said that a company is continuing a business activity is
contended TR 2019/11.
b) The taxation rules enumerated in ITAA 97, div 302, contains provisions dealing with
contributions as well as gifts for the purpose of deduction.
c) The tax rate, which is the highest that is required to be applied to a resident individual taxpayer
as applicable in in the year 2019-20 would depict an amount of $54097 in addition to 45% on the amount
in excess of $1800003.
d) A car and a motorcycle both are to be considered as exemptions with respect to CGT as
provided in ITAA 97, s 118.54.
e) All the assets belonging to the CGT regime, if owned by a person paying the tax, has been
subjected to destruction or has been lost from the individual the same is required to be brought under C1
category of CGT events and is to be dealt as per the rules in ITAA 97, s 104.205.
f) The threshold beyond, which any income would be exempted from being subject to taxation is
any amount falling below the threshold of $18200.
g) The case of Hayes v FCT (1956) 96 CLR 476 holds a considerable amount of significance with
respect to the receipts that a taxpayer receives for services that he has previously rendered made available
by the employer with whom he has been employed in the past. In this case, it has been contended by the
High Court that when a taxpayer receives an amount of money from the employer with whom he has been
previously employed with in relation to any service that he has discharge as a duty to his previous
1 TR 2019/1
2 The Income Tax Assessment Act 1997 (Cth), div 30
3 www.ato.gov.au, "Individual Income Tax Rates", Ato.Gov.Au (Webpage, 2019)
<https://www.ato.gov.au/Rates/Individual-income-tax-rates/>.
4 The Income Tax Assessment Act 1997 (Cth), s 118.5
5 The Income Tax Assessment Act 1997 (Cth), s 104.20
6 Hayes v FCT (1956) 96 CLR 47

TAXATION2
employment would be treated as capital gain. Such an amount is required to be subjected to taxation
under the CGT regime. This decision can be contradicted by the fact that it has been an established
principle that any income that is accrued from the application of exertion of personal nature would
amount to an ordinary income being accrued as in ITAA 97, s 6.57. However, in this case it has been
rendered that an amount received from previous employer as a remuneration for previously rendered
service towards employment would be subject to taxation as a capital gain. This contention has been
remedied by the fact that an income that has been received from a former employer has been accrued in
the past has been retained by the employer and was never been received by the employee, this leads to the
ripening of the income to take the form of capital nature and subsequently being paid as a lump sum to
the taxpayer.
h) An income can be perceived under any of the two broad categories depending upon the nature
of the same. One of them is the ordinary income and the other being statutory income. Ordinary income
would cover all the receipts that are received by the taxpayer even in the absence of any stringent
statutory legal principle to support it to be lifted to the category of taxable income. Even in the absence of
statutory recognition this form of income is said to be taxable. Such income may include income derived
from employment by way of wages, salary or allowance. On the other hand, there are certain incomes that
requires statutory recognition for the purpose of being included in assessable income under taxation. Such
receipts require being expressly recognised by the taxation statutes for the purpose of being lifted to the
status of taxable income. They would not be considered for the purpose of being subject to taxation in
absence of any statutory recognition. The capital gain taxation is an example of the tax regime, which
deals with receipts that are required to be supported by the statutory provisions of taxation laws for the
purpose of being taxed under the category of statutory income8.
i) There are two additional taxes that are required to be levied upon an eligible individual
taxpayer in addition to the net tax liability. These include the Medicare Levy and Medicare Levy
7 The Income Tax Assessment Act 1997 (Cth), s 6.5
8 Barkoczy, Stephen. "Foundations of taxation law 2016." (OUP Catalogue 2016).