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LAWS5065 Taxation Law

tag 0 Download 6 Pages / 1,469 Words tag 02-07-2021

Question:

Amy and Ben were living and working in Melbourne. They decided on a ‘tree change’, sold their Melbourne home and purchased a large country house on a 10 hectare block in central Victoria. Ben works part-time as an accountant and Amy as a locum doctor. Amy is popular with the elderly patients in the town and regularly is given home-made cakes and scones, along with his fee. On one occasion he treated a local wine maker’s dog for snake bite when the vet was unavailable and was given a dozen bottles of Lonarch Brae Shiraz in appreciation. The wine had a retail value of $360.

Amy and Ben enjoy gardening. They plan to establish a few hectares of grape vines and begin growing vegetables. They attend a continuing education course on organic farming and find in their second year they have a surplus of produce. Ben started making marmalade and relish using her mother’s recipes. Initially she gave them to neighbours but they became so popular that she opened a stall at the Newtown Growers Market held on the second Sunday of every month. Amy sold some of the excess to a local supermarket and now regularly supplies three retailers with sweet potatoes and pumpkin. They don’t keep records as they never intended to make a profit but estimate that in a good month gross receipts could be $500 to $600

Their neighbours have a citrus orchard and throughout the year vegetables are swapped for oranges and mandarins. This seems like such a good idea Amy and Ben decide to set up a ‘barter’ system in the area. To join the system a person must pay an up-front, one-off fee of $50 to Amy and Ben as a charge for the keeping of administrative records. Thereafter people register their goods or services to be bartered. For example, Sahara is a retired hairdresser and will provide hairdressing services at her home. No money changes hands. Sahara would receive a credit to her account of 15 to 20 ‘barts’ that she can exchange for goods or services of equal value from other registered participants in the scheme (fruit, vegetables, child minding, lawn mowing etc.).

Required:

(a) Advise Amy of any income tax consequences of para 1, above.

 (b) Citing relevant case law, explain how a hobby is to be distinguished from a business.

 (c) Advise Amy and Ben of any income tax implications arising in paras 2 and 3 above.

(d) Advise the participants in the barter scheme of any income tax implications.

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My Assignment Help. (2021). LAWS5065 Taxation Law. Retrieved from https://myassignmenthelp.com/free-samples/laws5065-taxation-law/tax-instalment.html.

My Assignment Help (2021) LAWS5065 Taxation Law [Online]. Available from: https://myassignmenthelp.com/free-samples/laws5065-taxation-law/tax-instalment.html
[Accessed 28 January 2023].

My Assignment Help. 'LAWS5065 Taxation Law' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/laws5065-taxation-law/tax-instalment.html> accessed 28 January 2023.

My Assignment Help. LAWS5065 Taxation Law [Internet]. My Assignment Help. 2021 [cited 28 January 2023]. Available from: https://myassignmenthelp.com/free-samples/laws5065-taxation-law/tax-instalment.html.


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