This assignment is to be submitted in one (1) Word document only. This assignment is to be submitted online via Moodle by the due date stated. It is suggested that you put your calculations into columns or tables to improve readability in the assignment document.
While the assignment is based on material covered, you are free to research and seek advice as widely as you find necessary as long as all sources are appropriately referenced.
The method of referencing to be used in this assignment is the American Psychological Association (APA) referencing method. Additional information regarding this method is available through the library and the Academic Learning Centre. When making a reference, cite the original source or authority in preference to a secondary source such as the textbook, especially when you are discussing various sections of legislation. This means you should make reference to legislation, cases and Tax Rulings as a priority to back up any arguments that you make in your assignment.
Part A (10%)
Your friend has got a job as a cadet journalist. He is writing a newspaper article on taxation matters and he has asked you to help him research some of the information he requires. He has given you a list of questions that he has to address in his article and he needs you to provide him with short answers to these questions and provide references so that he can check the answer if required.
1. Who is the chairman of the Board of Taxation?
2. What activities has the Board of Taxation been tasked with?
3. Where could information be found on the internet regarding the Australian Taxation Office and what they do?
4. Does the Taxpayer’s Charter allow the Australian Taxation Office to disclose your information to other parties? Under what circumstances would this be allowed to occur?
5. Which section of the Income Tax Assessment Act 1997 includes the value of allowances in assessable income? What is the title of this section?
6. What topic does Taxation Ruling TR 2015/2 discuss?
7. Who has the statutory responsibility for administering the Commonwealth tax system?
8. From where does the Commonwealth Government derive its power to make laws with respect to taxation?
9. What does ITAA36 stand for?
10. Is a definition of the term ‘income’ found anywhere in the tax legislation?
Part B (30%)
Alex McLeod carries on business as a sole trader in Wollongong as a rural mechanic and farm machinery spare parts retailer. He is married and has one dependent child, a daughter aged 12 years, who attends a local school.
Details provided by the taxpayer for the 2015/16 year of income are as follows:
* Sales of spare parts 100,000
* Charges for mechanical repair work 45,000
* Interest on joint savings account 2,800
* Interest on deposit with a United Kingdom
Bank (net of 10% United Kingdom withholding tax) 270
The joint savings account is in the names of the taxpayer and his wife. Interest amounting to $2 800 has been earned on this account.
* Gross wages (casual employees) 8 000
* Light and power 900
* Telephone and postage 1 500
* Advertising 2 300
* Purchase of farm machinery spare parts 44 000
• Purchase of new custom-made toolbox roller cabinet 18 000
* Accountancy fees 7 200
* Local Government rates on business property 2 700
* Insurance on business premises and contents 2 100
* Trade journals 300
* Sundry business expenses (all tax deductible) 11 500
* School expenses for daughter 1 200
* Donation to Australian Red Cross Society 100
* Membership subscription - Wollongong Apex Club 100
* Medical Expenses (net of Health Fund refunds)
Daughter 650 1 950
(McLeod has family cover in a private health fund, with hospital and ancillary cover. Premiums amounted to $2 400 for the year)
STOCK ON HAND (farm machinery spare parts)
- at 30/6/2015 $16,000
- at 30/6/2016 $14,000
PLANT ON HAND AT 30/6/2015
Original Cost Opening adjustable value
Holden utility 24,000 12,400
Toyota land cruiser 26,000 18,000
Ford 2 tonne truck 34,000 16,000
Motor vehicle hoist (heavy vehicles)
Diesel engine emission tester 70,000
On 1st October 2015, the Holden Utility motor vehicle was traded in for $10,000 on a new Holden Commodore sedan motor vehicle costing $32,000. The new Commodore sedan has been used 40% for private purposes.
The taxpayer uses the diminishing value method of depreciation and uses the effective life determinations as specified by the Commissioner. All assets were purchased after 10 May 2006. The business has not elected to utilise the small business entity provisions.
(a) Determine the taxpayer``s taxable income for 2015/16; and
(b) Calculate the income tax payable by the taxpayer for 2015/16 year of income.
In providing an answer to these questions you MUST also provide a discussion justifying the inclusion or exclusion of all items. Therefore, your answer will consist of both calculations and a discussion. The final answer must be submitted online in one (1) Word document via Moodle. You may find it useful to set out your calculations using tables or columns within this document for easy readability.
Do not exceed the word limit if you can possibly avoid doing so.
Criteria and marking guide
Criteria that will determine the mark given in relation to the written assessment will be:
• Identification of all issues that arise in the question
• Discussion of theory that underlies those issues
• Identification of relevant sections of legislation
• Identification of relevant case authorities
• Application of the law to the facts that arise in the question
• Mastery of referencing
Characteristics indicative of the respective levels of achievement in the assignment are as follows. Sometimes not all features will necessarily be present in any one assignment for that particular grade.
These criteria are a general guide as to the standard expected at the various levels. It is not necessarily the case that all these criteria will be met at a particular standard as there may be a superior performance on one of the criteria and not so satisfactory performance on another.
High distinction standard
• The answer is very well written and clearly expressed
• There is a demonstrated appreciation and understanding of the issues involved
• The answer is well structured and logically organised
• Demonstrated mastery of referencing system
• There is evidence of a comprehensive analysis of the issues
• Conclusions are backed by well-reasoned arguments demonstrating a detailed insight and analysis of issues
• Comprehensive coverage of all relevant issues
• References are made to the appropriate legislation for particular issues
• Statutory provisions are analysed and interpreted correctly
• The legislation is applied to the particular fact situation in a competent manner
• Consideration is given to the operation of the common law
• There may be consideration of issues not raised in the tutorials and answer guides
• The answer is well written and expressed
• The answer is structured and logical
• The issues have been reasonably well identified and appreciated
• There is correct use of referencing
• Issues have been analysed
• Reference is made to all appropriate legislation, although the analysis and interpretation is not as detailed and reasoned as for the high distinction standard
• The effect of the common law is considered
• There is a comprehensive coverage of the issues
• Occasional errors of law and legal reasoning may still be present
• The answer is generally well written and expressed
• The answer is structured and sequential
• Referencing is satisfactory
• Issues are identified and addressed
• There has been an attempt to analyse some of the issues
• The coverage of issues is reasonably comprehensive often with a good treatment and analysis of particular points
• Errors of law and incorrect reasoning may sometimes be present
• Statutory interpretation may require improvement
• Depth of treatment is often lacking in some of the issues
• The answer is able to be followed and understood
• The answer could perhaps be better organised and structured
• The referencing may need improvement
• Issues may need to be identified and addressed in more depth
• Analysis when present may be incorrect
• Some familiarity with the legislation and its application is demonstrated
• Sometimes the conclusions reached are simple
• There may be several errors of law
• There may be quantities of material of marginal relevance included in the answer
• The answer may be significantly short of the required length
• The written expression is poor and difficult to understand
• The answer is poorly organised
• There has been a failure to identify and address the issues in the question
• Referencing is generally inadequate
• There is a lack of familiarity with the legislation and its appropriate application
• The reasoning and application demonstrated is poor
• Frequently there is much irrelevant material.