ACCT6005 Taxation Law And Practice

Answer to question 1:

Answer to question 2:

Answer to question 3:

In the present case study, it has been found that Broadmeadow has derived income in the form of fees from the business activities of training and as a result of this such income would be considered as the assessable income. According to “section 6-5 of the ITAA 1997” an individual deriving income deriving directly from the business would be considered a taxable earnings (Barkoczy 2016). Additionally, Broadmeadow Park has generated earnings from other kinds of receipts such as prize money, Brisbane Cup trophy and trade in tractor. In respect to “section 6-5 of the ITAA 1997” these incomes would be considered as assessable income and would attract tax liability. The receipts were inclusive of GST and under the “GSTR 1999” it would attract GST for the amount received (Anderson, Dickfos and Brown 2016).

Broadmeadow Park during the business operations sustain expenses which can be considered as allowable under “section 8-1 of the ITAA 1997”. According the judgement in the case of “Lunney v FC of T (1958) 100 CLR 478” expenses that are not private in nature and incurred in gaining assessable income would be allowed as allowable deductions (Braithwaite 2017). Similarly, Broadmeadow incurred expenses on salary and wages together with the superannuation contribution. Such expenses were sustained were directly related to the gaining of taxable income and deductions for the same would be allowable.

According to the “taxation ruling of TR 97/17” deductions for entertainment by way of food and meal would not be considered allowable for deductions. “Division 32” prohibits a taxpayer from claiming an allowable deduction on entertainment by way of food or drink (Robin 2017). As decided in the case of “Bow and others v. Heatly (1960) STL 311” the federal court states that the entertainment expenditure that is incurred in the meal would be prohibited from claiming deductions and fringe benefit tax will be applicable in this regard.

Answer to question 4:

As defined under the taxation ruling of “GSTR 2000/15” it helps in determining the acquisition that are creditable acquisition with the objective of ascertaining income tax credit. In this study, Jimmy can claim GST credits under the “GSTR 2000/15” (Barkoczy et al. 2016). An assertion can be bought forward in this regard is that under the “GSTR 2000/15” Jimmy can is allowed to claim the input tax credit for the creditable acquisition for the transaction occurred in business.

However, it is noticed that components such as Farrier is not under the GST registered component and simultaneously Jimmy is prohibited from claiming an input tax credits on the GST. As it has been in this rule a registered business or falling under the compulsion of obtaining the registration, the amount of GST that a business would be paying will be entitled to claiming input tax credit for the GST supplies that is made by the business (Woellner et al. 2016). An important guidance in the current situation is that the component Farrier is not registered under the “GSTR 1999” Broadway Park and the company is prohibited to claim input tax credit in this respect.

Answer to question 5: 

Reference List:     

Anderson, C., Dickfos, J. and Brown, C., 2016. The Australian Taxation Office-what role does it play in anti-phoenix activity?. INSOLVENCY LAW JOURNAL, 24(2), pp.127-140.

Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.

Barkoczy, S., Nethercott, L., Devos, K. and Richardson, G., 2016. Foundations Student Tax Pack 3 2016. Oxford University Press Australia & New Zealand.

Braithwaite, V. ed., 2017. Taxing democracy: Understanding tax avoidance and evasion. Routledge.

ROBIN, H., 2017. AUSTRALIAN TAXATION LAW 2017. OXFORD University Press.

Woellner, R.H., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law Select: Legislation and Commentary 2016. Oxford University Press.