HI6028 Capital Gains Taxation And Cost - Detailed Essay.

Discuss about the HI6028 Capital Gains Taxation and Cost.

Land Acquisition and Capital Gain Tax

Every concept in the report are delineated according to the most recent diagrams of tax collection with the goal that the profound examination can be rendered. The real stipend of the administrative specialist should be possible with the frameworks of tax collection, as the reference of the case laws has been given. The Fringe Benefit impose is likewise broke down as indicated by the Australian Taxation. The general report has been led according to the changed laws with the goal that the best possible investigation on every one of the angles and capital additions can be handled in appropriate way. The general task work will give appropriate help to the client in the ascertainment of the assessable pay under shifted heads so that to have better direction on the work activities. This will help the experts in the assurance of the assessable pay of the person. Furthermore, the undertaking work has additionally accommodated the examination of the Fringe benefits assess in understanding to the Australian Taxation law. With the end goal of the better understanding and information, the case law has been eluded to the remuneration of administrative specialist. The report incorporates the examination of different assets amid the present year in congruity with that of Australian Taxation Laws.

It has been accepted that the customer is living in Australia and is an Australian inhabitant. The procedure of estimation has been done as needs be. Further, the specialist in charge of the viable and appropriate supervision lives with the Australian Taxation Office so that to achieve better work tasks prompting a more prominent level of honesty. The specialist that is in charge of taking care of the considerable number of issues identified with the tax assessment is the Australian Taxation Office (La Torre, et, al., 2018).

The amount for securing cost of the land will be directed according to the present offering cost until the point that the agreement for the deal has been entered. The empty land was gained for the measure of $120000. It encases the expense of sewerage, water, and land charges which is $100000 and $20000. Hence, it very well may be dissected that the pay which is gotten as the pay in the principal year will be dealt with as the proprietor of capital resources. Additionally gave, it has been seen that after September 1999 the empty land will be thought about. The treatment will be done in various and unmistakable way. The markdown technique has been utilized to figure the tax assessment as the land was obtained on January 1and the half of the rebate will be permitted. It tends to be said that the wage which is gotten as the stipend for the principal year will be considered the proprietor of capital resources. The incentive at which the land is gained will be changed in accordance with the present offering cost. The salary will be earned when the agreement of the deal has been made around the same time (Australian taxation office. 2018).

Antique Bed - Long Term Capital Gain

Given amount:

Sales Price = $320000

Purchase Price = $100,000

Serial no.	Particular	Amount
1	Sales Price	$320000
2	Purchase Price	$100000
3	Cost of Local council, sewerage and water	20000
4	Capital Gain (320000-120000)*50%	= $200000   = ($32000-100000-20000)

As mentioned in the case study, she bought an antique bed for #35, 00 which would be kept with her for a long time which was more than 1 year. From this situation, it can be observed that it would be taken as long term capital gain due to covering more than 1 year of period. Long term capital gain will be entitled. To understand this purpose, adjustment of amount will be necessary at which it would be entitled or acquired. It has been acquired into the method of Inflation index method in order to compute selling price through capital gain (Australian taxation office, 2018).

Following are the indexation method to calculate actual capital gain:

Serial no	Particulars	Amount ($)
1.	Selling Price	$11,000
2.	Purchase Price	$3,500
3.	Cost of Alterations	$1,500
4.	Capital gain/ loss	$11,000 - $3,500 - $1,500
		=$6,000

The calculation of the capital gain and income would be ascertained with the help of discounted method in order to take it into consideration and its value which would be less than such value which could be obtained through indexation method (La Torre, et, al., 2018).

As per the situation given in the case study it is concluded about a painting which has to be sold out in an art auction for the value of $125,000 in current year. Such amount of sales will be taken as capital gain in current year because it describes that actual selling in the art auction of the paintings. The same method of indexation will be utilized to compute the value of taxable income (Carnegie, 2014).

Serial no.	Particulars	Amounts ($)
1	Selling Price	$125,000
2	Purchase Price	$2,000
3	Capital Gain/ Loss	=$125,000 - $2,000 =$123,000

Ascertainment of taxable income will be done as per calculated amount which is $123,000.

According to the case study, situation has been analyzed that the individual is having additional substantial shares portfolio, which is indulged in the business of selling and purchasing activity. For this context, client has to buy and sale all those shares to different organization concerned. That is why the income attained from sale of shares which would not be treated as capital income and gain. Such situation is being occurred due to conduction of such operations from client side with regards to the motive and facts. All income has been calculated under the perspectives of head “income from business and operations but not related to capital gain income (La Torre, et, al., 2018).

In the case study, further provided information and provisions are based on Australian Taxation Laws. The brokerage fees and cost of stamps would be paid by an individual and client which will be part of preliminary share prices. So these are the reasons to adjust and treat the income just like that. It has been seen and observed that major motive of client is to make money and earn benefit of aided dividend and other sources of income.

Serial no. & issues:	Particulars	Amounts
(a) Securities of Common Bank.	Sales Price = Selling Price of Each Security * Total Number of Shares	= $47 * 1000 = $47,000
	Total Purchase Cost = Purchase Price of Each Security * Total Number of Securities	= $15 * 1000 = $15,000
	Cost of Brokerage Charges	= $550
Capital Gain Income	Capital gain on Shares of Common Bank Ltd	47,000 –15000– 550 = $30,700
(b) Capital gain or loss on sale of securities of PHB Iron Ore Ltd	Purchase Price of Shares = Purchase Price of Each Stock * Total Number of Stocks	= $12 * 2500  = $30,000
	Value of Sales of Shares = Per Security Selling Price * Number of stocks/ securities	= $25 * 2500 = $62,500
	Cost of Brokerage Charges	= $1,000
	Stamp Duty Paid on the Stocks of PHB Iron Ore Ltd:	= $1,500
Capital Gain Income	value of capital gain on the sale of shares of PHB Iron Ore Ltd Capital Gain = Total Sales Price–Total Purchase Price–Brokerage Cost–Cost of Stamp Duty	= 62,500 – 30,000 – 1,000 – 1,500 = $30,000 (CGI)

(c) Capital Gain or Loss on the Sales of Shares of Young Kids Learning Ltd	Total Purchase Price = Per Share Purchase Price * Total Shares Purchased	= $5 * 1200 = $6,000
	Total Sales Price of Young Kids Learning Ltd Shares = Per Share Selling Price * Total Shares	= $0.50 * 1200 = $600
	Cost of Stamp Duty Paid	= $500
	Cost of Brokerage	= $100
Capital Gain Income	Capital Gain = Total Sales Price – Total Purchase Price – Brokerage Cost – Cost of Stamp Duty	= 600 – 6000 – 100 – 500 = -$6000
(d) Capital Gain or Loss on Sale of Shares of Share Build Ltd	Total Purchase Price = Purchase Price for Each Share * Total Shares Purchased	= $1 * 10,000  = $10,000
	Total Sales Price = Selling Price of Each Share * Total Shares Sold	= $2.50 * 10,000  = $25,000
	Expense of Stamp Duty faced on the Shares	= $1,100
	Cost of Brokerage Charges Faced on the Shares	= $900
Capital Gain Income	Capital Gain = Total Sales Price – Total Purchase Price – Brokerage Cost – Cost of Stamp Duty	= 25,000 – 10,000 – 900 – 1,100 = $13,000

Painting - Capital Gain Calculation

In the case study as per given in the situation helps to observe all entire man power to get verified and setting all benefits from taxes. At first, this case study reveals that the capital gain which variation between all sales value between sales price of violin and its market value which could to be sold to the neighbor in Queensland would be less. However the cost of violin would be gained to raise the profit will also be valued from the selling price of violin (Australian taxation office, 2018).

Indexation method = CPI for the factor which might be ended in September 1999 divided by CPI in which expenses would be incurred.

Particulars	Amount
Purchase Price of Violin	$5,500
Selling Price of Violin	$12,000
Capital Gain or Loss	=12,000 - 5,500 =$6,500

However for major objection, in the determination of net capital gain & loss, whole capital gains which would be grasped from all sources to be summed up.

Determination of Value to evaluate Net Capital Gain or Net Capital Loss
Particulars	Value ($)	Gross Value in $
Capital gain by selling the vacant land	20,000
Amount received from insurance company as claim for the antique stolen	6,000
Selling the painting	123,000
Sale of 1000 securities of Common Bank	30,700
Sale the securities of PHB Iron Ore Ltd	30,000
Sale of securities of Young Kids	-6,000
Sale of securities of Share Build Ltd	13,000
Selling the violin	6,500
Total Capital Gains from Different Transactions	$223,200	$223,200
Less: Net Capital Loss of Previous Year		-$8,500
Less: Capital Loss arising from selling the piece of sculpture in previous year		-1,500
Net Capital Gain		$213,200

As per the situation to observe the manpower of companies, it is to verify and get the benefits from taxes. Firstly, the fringe benefit can be taken as facility to provide the employer to the employee. Companies provide FB to their employees at the movement of computing Australian Taxation Laws. The value related to FBT in determined manner will be observed to consider various factors. It is major fact run by the company to evaluate the value of taxable income with the help of FBT.  As such recommendation to get value of taxable income, various methods will be used to various factors related to get actual value of FBT (Austill, 2018).

According to Australian law and taxation, the value of income tax and its principle to purpose of the motive to compute tax applicable for travelling. As per given in the question, car has used by Jasmine to personalize and observe in addition to travel for 10000km. As per Jasmine’s situation distance would be charged personally (Australian taxation office. 2018). Australian taxation Law would be around 12%, so GST will not be treated on such cars as per given ratios:

The value of Car = 33000*100/110

=$330000

ST Fringe Benefit = 30000*20/100

=$6000

= $500 which would be included in GST amount.

= (500-[550*1/11])

Interest Income tax treatment:

In the companies the Australian taxation law is the part of loan which can be delivered for the man power in order to take into account. Overall interest of loan and advantages would be taken into observation for the motive of deduction (Huizinga, et. al., 2018)

Shares - A Different Perspective

Interest =$450000*4.25/100

=$19125

Heater Treatment:

In this adjustment, it was observed that the sales value of heater will be higher than  its purchasing price.  It would be adjusted as a fringe benefit which value would be $1300.

Taxable value= (Car Value*2.0802) + (repair expenses * 2.0802) + (Interest on loan * 1.886)

= (6000*2.0802) + (500*2.0802) + (19125*1.8868)

= $49606.35 (Australian taxation office. 2018).

The fringe benefit tax would be charged in following case. As given in the case rate of 47%

Fringe benefit tax = = 49606.35*47/100

      = 23314.98

Fringe Tax liability = Tax on the benefit –GST credit

= 23314.98 – 3050

 = $20264.98

In this provision of treating various shares, shares were purchased by Jasmine in order to vary its personal use rather than selling her husband.

Particulars	Amount
Value of Interest which is taxable (400000*4.25/100)*1.8868	32075.6
Gross taxation value 32075.6 + 12481.2 + 1040.1	$45596.9
Fringe Tax Benefit 45596.9*47/100	$21430.54
Net Fringe benefit liability of tax = Total Taxable Amount x FBT Tax Rate
= $1,112,594.9 x 47%
= $522,919.603

Conclusion:

Above discussion dictates about various methods and principles used in the taxation law n order to provide appropriate figures of taxable income through calculation and analysis. It can be observed through taxation law, that the report has varied all different altered needs and requirements which would be taking into consideration in order to access taxable income of an individual. Over all assignment has provided understanding of financial and taxation laws in depth. It has concluded the yearly amount of capital gain to receive that and conclude their best for the purpose of determining assessment of income of the individual Australia. Two methods of understanding can be entertained of capital gain. It is concluded around two strategies

From the discussion and calculation provided in the overall report work it can be concluded that all the values in respect of the assets are done as per the Australian Taxation law. In addition the report work concludes on the varied and altered requirements to be taken into consideration while computing and assessing the taxable income of an individual. Further provided, the report work has concluded on the amount to be considered for the determination of the capital gain. For the purpose the report work concludes on the two methods for better understanding that involves indexation factor and the discounted factor. The overall project thus concludes on the in-depth understanding of the Australian Taxation laws for the purpose of the assessment of the taxable income (Moretto, et. al., 2014).

References:

Austill (2018). INCOME TAX ASSESSMENT ACT 1997 - SECT 82.135 Payments that are not employment termination payments. Retrieved from: https://www5.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s82.135.html

Australian taxation office (2018). Amounts not included as income. Retrieved from: https://www.ato.gov.au/Individuals/Income-and-deductions/Income-you-must-declare/Amounts-not-included-as-income/

Australian taxation office (2018). Capital gains tax. Retrieved from: https://www.ato.gov.au/General/Capital-gains-tax/

Carnegie, G., (2014). Pastoral accounting in colonial Australia: a case study of unregulated accounting. USA: Routledge.

Huizinga, H., Voget, J. & Wagner, W., (2018). Capital gains taxation and the cost of capital: Evidence from unanticipated cross-border transfers of tax base. Journal of Financial Economics.

La Torre, M., Dumay, J. and Rea, M.A., (2018). Breaching intellectual capital: critical reflections on Big Data security. Meditari Accountancy Research.

Moretto, N., Kendall, E., Whitty, J., Byrnes, J., Hills, A.P., Gordon, L., Torstar, E., Scuffham, P. & Comans, T., (2014). Yes, the government should tax soft drinks: findings from a citizens’ jury in Australia. International journal of environmental research and public health, 11(3), 2456-2471.