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HA3042 Taxation Law For Periodical And Regular Payment

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Questions:

1. The Lotteries Commission conducts an instant lottery called ‘Set for Life’ under which a winner who scratches three ‘set for life’ panels wins $50,000 each year for 20 years. The first $50,000 is payable as soon as the winner is notified, and later amounts are payable on the first anniversary of the first payment. In the event of the death of the winner, the Commission may pay any outstanding amounts to the deceased’s estate
 
Is the annual payment income? Give reasons for your decision
 
2. On the assumptions that an accrual basis applies and the cost of sales and other outlays are allowable deductions for tax purposes, calculate the pharmacy’s taxable income.
 
3. What principle was established in IRC v Duke of Westminster [1936] AC 1? How relevant is that principle today in Australia?
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