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Law Assignment Sample Question And Solution
HA3042 Taxation Law Assignment
Question:
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.
Requirement:
Is the annual payment income? Give reasons for your decision
Answer:
Introduction
The issue is related to the classification of yearly payments as having the nature of income.
Ordinary income does not have any definition in the taxation acts. The meaning of ordinary income is derived from the case law and is reliant on the principles that emerge from the decisions. The taxation legislation's role is to take into account the value of ordinary income in the taxable income given the amount meets the criteria ascertained by the principles of case laws (Roberts 2017). Read More...
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