Charlie is an employee of Shiny Homes Pty Ltd (Shiny Homes). He is a real estate agent. Shiny Homes also operates a separate business on landscaping to ‘do up’ houses before it is put up for sale.
From the period 1 July 2016 to 30 June 2017 the following events took place:
In 1 September 2016, Shiny Homes provided Charlie with a 4 wheel drive sedan value at $70,000. From 1 September 2016 to 31 March 217 the car travelled 80,000 km. He parked his car in his garage in the evenings. Before he goes away for his Christmas holidays, the car was sent to be serviced and he could not use his car for 2 days. He estimated that he uses 70% of the time was for business purpose and the other 30% of the time for private use. Charlie also maintained a log book for 12 weeks and the following information were recorded:
50,000 km were work related
Petrol and oil per month - $2,000
Repairs and maintenance per month - $3,500
Registration per annum - $240
Insurance per annum - $960
Note: these expenses were incurred by Shine Homes.
In 1 February 2017, Charlie was involved in a minor car accident and he could not use the vehicle for 2 weeks (1st to 14th February 2017). This occurred before Charlie a week before Charlie’s wedding and Shine Homes decided to hire a car for that period at a cost of $1,000 to allow Charlie and his wife Deborah to go for their honeymoon trip to Gold Coast. Shine Homes paid for their honeymoon accommodation which is worth $3,000.
During working hours Charlie parked his car at Secure Parking (an unrelated entity) and Shine Homes paid $200 per week.
Advise both Charlie and Shine Homes about their fringe benefit consequences of these events. You are required to compute the taxable benefit where necessary.
You need to cite the relevant case law and / or legislation
1.Allan and Betty 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. Betty works part-time as an accountant and Allan as a locum doctor. Allan 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.
2.Allan and Betty 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. Betty 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. Allan 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.
3.Their neighbours have a citrus orchard and throughout the year vegetables are swapped for oranges and mandarins. This seems like such a good idea Allan and Betty 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 Allan and Betty as a charge for the keeping of administrative records. Thereafter people register their goods or services to be bartered. For example, Suzie is a retired hairdresser and will provide hairdressing services at her home. No money changes hands. Suzie 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.).
(a) Advise Allan 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 Allan and Betty of any income tax implications in paras 2 and 3 above.
(d) Advise the participants in the barter scheme of any income tax implications.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2020). Taxation. Retrieved from https://myassignmenthelp.com/free-samples/tm-ta9p1-taxation.
"Taxation." My Assignment Help, 2020, https://myassignmenthelp.com/free-samples/tm-ta9p1-taxation.
My Assignment Help (2020) Taxation [Online]. Available from: https://myassignmenthelp.com/free-samples/tm-ta9p1-taxation
[Accessed 23 October 2020].
My Assignment Help. 'Taxation' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/tm-ta9p1-taxation> accessed 23 October 2020.
My Assignment Help. Taxation [Internet]. My Assignment Help. 2020 [cited 23 October 2020]. Available from: https://myassignmenthelp.com/free-samples/tm-ta9p1-taxation.
It is okay if you are not able to get hold of authentic research material for your complicated essay topics. We have a huge database of relevant and credible research material. Share your academic requirements with us and we will write the paper for you. Our expert writers will incorporate the right information to enhance the quality of your assignment. Thus, you can expect higher grades in your paper when you get urgent assignment help from us.
Answer to Question 1 In this case the CGT events are sale of investment property, sales of shares and real estate property as per the section 100-20 of the ITAA 97. The cost base should include the cost of disposal and acquisition of assets as per section 110-25(3) of ITAA 97. Thesection 110-25(4)of the ITAA 97 provides that the renovation cost should be added to the cost base of the property. The section 100-45 of the ITAA 97 provides detail...Read More
Answers: 1. The section 100-20 of the ITAA 97 states that CGT event occurs from the sale of CGT assets are sale of investment property, real estate property and sales of shares. The costs associated with acquisition and disposal are included in cost base as per section 110-25(3) of ITAA 97. The cost of $250000 incurred for renovation the property will be added to the cost base of the property as per the section 110-25(4). ...Read More
Answer: 1). ...Read More
Answer: PART A Answer to Question i Arthur Murray (NSW) Pty Ltd V FCT (1965) 114 CLR 314 Case Facts The person paying tax was associated with providing lessons for dancing to students and also allowed discount to those who make early payment of fees. This practice was used so that the students gets encouraged in paying the fees early. In the agreement between...Read More
Answer :- 1.As stated by the rules the Fringe Benefit tax Assessment Act 1986 fringe benefits are those benefits which the employer pays to the employees other than actual wages and salary. The provisions in relation to fringe benefits would only be applicable when it can be established that the relationship between the provided and receiver is that of an employer and employee. Only when the relationship has been established the rule...Read More
Just share requirement and get customized Solution.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat. If you are unable to calculate word count online, ask our customer executives.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
The assignment demonstrate clear competence in understanding the macroeconomic concepts tested in this assignment.
Read the work and it looks great. Thanks for the assignment and look forward for more assignments with you
The assignment was well constructed and really good organized. I received it on time and the grade was great at the and.
Thanks! The expert is so fast in submitting my assignment so that I can double-check.