Taxation Theory, Practise and Law

Running head: TAXATION THEORY, PRACTISE AND LAW
Taxation theory, practise and law
Name of the Student:
Name of the University:
Authors Note:

TAXATION THEORY, PRACTISE AND LAW
1
Table of Contents
Answer to Question 1...................................................................................................2
Identification of GST Consequence..............................................................................2
Answer to Question 2:..................................................................................................3
1. Identification of material facts regarding the capital gain tax (CGT) consequences
of Emma’s transactions discussed in the assignment question:..................................3
2. Identification and analysis of legal issues / legal question and relevant laxation
law:................................................................................................................................5
Reference and Bibliography:........................................................................................7

TAXATION THEORY, PRACTISE AND LAW
2
Answer to Question 1
Identification of GST Consequence
The goods and services taxes form an important part of the tax regime of
Australia. The goods and service taxes are charged when there is a trade between
two dealers which are covered under GST Act. The GST is applied and included in
the prices of goods or services provided between two dealers who are registered
(Lloyd 2017). The regulation of GST act also allows the dealer to claim GST credit or
input tax credit for the purchases which was made by the dealer. The provision
further provides that the trader can only claim GST credit on purchases if the
purchases were made from a registered supplier. In addition to this, in relation to
who can claim GST credits, there are certain conditions, which need to be satisfied
and the same are listed below:
 The dealer should be registered under the provisions of GST Act and the
supplier should also be registered not considering exceptions,
 The purchases, which are made by the trader, should be GST inclusive so
that the trader can claim input tax credit.
 Further there is a requirement of tax invoice from the supplier for purchase of
goods and the invoice should clearly show the price which is paid for the
purchase.
 There is a time limit for claiming input tax credit which is set at four years as
per the GST regulations (Evans, Lignier and Tran-Nam 2013).
 The business needs to include the amount which is claimed as input tax credit
in the business activity statement which the business needs to submit to the
Australia Tax office.
In general, if a good or service which is taken and the same includes GST
included in the same then the trader is eligible for claiming GST credit. The GST
provision is applicable on any trade which involves goods or services (Braithwaite
2017). The applicability of the GST for any trader would be based on the conditions
stated above.
The case which is provided in the question deals with the business of City Sky
Co which is engaged in developing residential properties which is sold to customers.
The case shows that the business purchased a vacant plot of land for the purpose of
developing 15 residential properties on the same. In addition to this, it is seen from
the case that the company took services from a local lawyer Maurice Blackburn for
providing development services to the business. The case study also states that the
business of City Sky Co is registered under the regulations of GST Act.
City Sky Co is registered under GST Act and therefore the company is
eligible for claiming input tax credits on any purchases of goods or services which is
taken by the business. The case shows that the business of City Sky Co has
purchased a vacant plot of land which is considered to be an immovable property
and therefore the same cannot be covered under the purview of GST regulations
(Dixon and Nassios 2018). The reason for not considering vacant land as good or
service is because the property is immovable and sale of vacant land would be
covered under Capital gains taxes (Taylor and Richardson 2014). The business is
planning to develop residential properties on the vacant land and therefore the
materials which are used for construction would be attracting GST. In addition to this,
any services which is taken by the business during the construction phase would