$20 Bonus + 25% OFF
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!
Add File

Error goes here

ACCG924 Taxation Law

tag 0 Download3 Pages / 681 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Questions:

Part A

Gringo Ltd (known as Gringo) is a resident Australian company that supplies office equipment to businesses and private individuals in Sydney. Gringo has two equal shareholders – Amy and her husband Ben who hold 50 issued shares each in the company. Amy and Ben acquired their shares for an issue price of $300 per share on 1 January 2008 when Gringo was incorporated.

The business of Gringo was initially carried on from leased premises. On 1 January 2012 Gringo purchased the leased premises which included an administration office, a warehouse and an adjoining car park for customers. Initially Gringo considered the purchase of only the warehouse for $800,000, but then decided to purchase the administration office, the warehouse and the car park for $2 million.

Gringo was required to borrow $950,000 on 1 January 2012 to purchase the business premises. Interest on the 12-year loan was 10% and there was an upfront establishment fee of $3,000.

In March 2012, Gringo found out that the plumbing and electrical systems in the administration office needed repairing and spent $30,000 to rectify the problems. In January 2013, Gringo paid a builder $80,000 to add two rooms to the administration office. The driveway leading to the car park had to be repaired in 2014 at a cost of $18,000 because tree roots were damaging it.

In December 2015, a violent hail storm caused damage to some parts of the warehouse roof. Gringo decided to replace the entire roof at a cost of $45,000 and added insulation and air conditioning at a cost of $30,000. The storm also damaged a large sign advertising the business and it cost Gringo $2,000 to get it working again.

Gringo purchased some equipment on 1 July 2013 that would be used solely to move goods around the warehouse. The equipment cost $44,000 (GST inclusive) and Gringo is entitled to claim an input tax credit for the GST included in the purchase price. Gringo claimed a capital allowance for the vehicle for 2013/14, 2014/15 and 2015/16, using the prime cost method and basing the calculation on an effective life of five years. On 1 July 2016, Gringo sold the equipment for $12,000 to the brother of Amy, one of the Gringo shareholders. The market value of the equipment at the time was $28,000.

Gringo decided to relocate its business to New Zealand from 30 June 2017 and, as a result, on 1 May 2017 entered into a contract to sell the business premises for $3.8 million. Legal fees associated with the sale were $12,000 and other selling costs amounted to $8,000.

Required:

1. Based on the information provided and assuming Gringo had a carry forward capital loss of $30,000 at 30 June 2016, explain and calculate the net capital gain or capital loss to be included in Gringo's assessable income for 2016/17 as a result of the sale of the business premises

Part B

Amy and Ben moved to New Zealand on 1 July 2017 when the Gringo business was relocated and their intention was to stay there indefinitely. The assets that they still owned when they moved on 1 July 2017 were their shares in Gringo, 2,000 Commonwealth Bank shares, their family home in Sydney and two cars.

The plan was that they would primarily be based in New Zealand and would each be paid a salary as employees of Gringo. Amy would, however, work for Gringo for four months each year in Sydney because of the need to maintain close links with customers and to make new business contacts.

Required:

1. Explain the capital gains tax consequences for Amy and Ben when they move to New Zealand. Include in your explanation any choices Amy and Ben can make that would change the CGT consequences of their move.

2. Explain how the salaries earned by Amy and Ben would be taxed after they move to New Zealand.

You must support your answers with legal sources (legislation, rulings or cases). If you have insufficient information and need to make assumptions, those assumptions must be reasonable and must be stated.
Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

Upload
Unique Document

Document
Under Evaluation

Get Money
into Your Wallet

Total 3 pages, 1 USD Per Page

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help (2021) Taxation Law [Online]. Available from: https://myassignmenthelp.com/free-samples/accg924-taxation-law/capital-gains-tax-consequences-for-amy.html
[Accessed 23 September 2021].

My Assignment Help. 'Taxation Law' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/accg924-taxation-law/capital-gains-tax-consequences-for-amy.html> accessed 23 September 2021.

My Assignment Help. Taxation Law [Internet]. My Assignment Help. 2021 [cited 23 September 2021]. Available from: https://myassignmenthelp.com/free-samples/accg924-taxation-law/capital-gains-tax-consequences-for-amy.html.


Look no further if you are worried about the plagiarism issues in your assignments. Get 100% plagiarism free assignment help Melbourne from MyAssignmenthelp.com. Our 5000+ PhD-qualified, in-house writers develop each assignment from scratch. They understand that assignments should be informative, updated, and relevant to the current circumstances. The writing process involves looking for a essay topics, citing recent sources to keep the write-up relevant, and scan using the university-approved plagiarism checking tool.

Latest Accounting Samples

ACFI3009 Contemporary Accounting Issues

Download : 0 | Pages : 11

Question: Part 1 Introduction: Mark-to-market accounting refers to the process of determining the fair value of the company’s assets and liabilities based on the market price of those similar assets and liabilities. On a more specific note, mark-to-market is the reasonable value of an asset or liability that varies over the period depends on the market value of that assets and liability (Ball, Jayaraman and Shivakumar 2012). Most of the...

Read More arrow Tags: Australia Campsie Management Hygiene and Toxicity University of New South Wales Humanities 

ACCT20074 Contemporary Accounting Theory

Download : 0 | Pages : 19

Answer Introduction The second topic that is discussed in the current study indicates towards implementation as well as relevance of social contract with regard to the Legitimacy Theory in the area of accounting. It can be hereby witnessed that legitimacy theory in the area of accounting is important in augmenting the financial framework of a corporation and thus, involving and executing social contract along with the theory of legitimacy can b...

Read More arrow Tags: Australia Strathfield Management object modelling University of New South Wales Masters in Business Administration 

MGB305 Accounting And Finance

Download : 0 | Pages : 5

Answer: Introduction: The report directly indicates that relevant financial condition of APN Outdoor Group by evaluating the financial ratios and WACC of the organisation. Furthermore, the report aims in providing in-depth financial condition of the organisation and its overall capital structure. Depicting the APN’s capital structure: The evaluation of the overall financial report of APN mainly indicates that the company is more focus...

Read More arrow

ACC701 Financial Accounting

Download : 0 | Pages : 10

Answer Introduction In the past few years, a number of Australian firms have been liquidated as a result of their failure to settle their liabilities once they turn due. Some of these firms include the ABC Learning, One-Tel as well as HIH Insurance. As a result, this study aims to present analysis of the major events which led to these firms being liquidated. It will start with background information about the three firms followed by ana...

Read More arrow Tags: Australia Auburn Humanities Web Technologies University of New South Wales Management 

ACT202 Management Accounting

Download : 0 | Pages : 24

Answer: Assign the costs to the activity centres using the resource driver consumption patterns shown in Schedules 1 and 2: The following table shows the assignment the costs to the activity centres using the resource driver consumption patterns shown in Schedules 1 and 2:    (Amounts in $)  Cost category  Wages  Building costs  Depreciation  Consumables &nbs...

Read More arrow
Next

5% Cashback

On APP - grab it while it lasts!

Download app now

*Offer eligible for first 3 orders ordered through app!

ribbon
callback request mobile
Have any Query?