1. Word limit is for the answers to the two questions and does not include footnotes, nor title page.2. Any standard report format is acceptable.3. Footnote citation style: As in prior law related units, students are advised by the MQ Library to use AGLC4 referencing guide.Please refer to this link http://libguides.mq.edu.au/referencing/AGLC
DEPARTMENT OF ACCOUNTING
AND CORPORATE GOVERNANCE
ACCG924 Taxation Law
Session 1 2019
Case Study
Information and Instructions
• Weighting of this assessment task: 25%
• Format of submission: Microsoft Word document, 12-point type, double spaced.
• Method of submission: on-line, uploaded to iLearn
• Due date and time: Friday, 3 May 2019, at 11pm.
• Your written response to this assignment must be presented in a report format. Bullet points are not acceptable.
• Responses to this assessment task must not exceed 2,000 words.
• No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for special consideration is made and approved. No submission will be accepted after solutions have been posted.
IMPORTANT:
? You must cite relevant cases, ATO rulings, and legislative references – (as footnotes) – to support your answers.
? Your response must also provide reasons that explain and support your answers.
BACKGROUND INFORMATION
Fiona Johnson is a well-known software designer, who was born and lived in Sweden. On 1 September 2018, she arrived in Sydney on an unrestricted work permit to take up a job with Australian Software Pty Ltd for a period of eight years. As an incentive to join this company, Australian Software Pty Ltd provided her with two airline tickets and vouchers for a holiday in London valued at $10,000. She was also offered $150,000. This was to be paid in two instalments - $75,000 on joining the company and $75,000 after one year of service. In addition, Fiona will also receive a lump sum payment of $200,000 if she resigns or is terminated. The condition is that she cannot set up a business in Sydney in competition with Australian Software Pty Ltd for five years after resignation or termination.
On 1 June 2019, Fiona sold the following assets in order to purchase an apartment in Sydney:
• 20,000 shares in a Swedish company: acquired on 1 July 1984 at cost of $5,000. The market value was $20,000 on 1 September 2018 and was sold for $25,000 on 1 June 2019.
• An investment flat in Sweden: acquired on 15 July 2018 at a cost of $185,000. The market value was $200,000 on 1 September 2018 and was sold for $210,000 on 1 June 2019.
• An investment property in Melbourne was sold for $550,000 on 1 June 2019. She acquired this property for her daughter who was studying at the University of Melbourne. She paid $300,000 on 1 April 2016 to acquire the property. The market value of the property as at 1 September 2018 was $500,000.
For the year ended 30 June 2019, Fiona received $150,000 by way of salary. As part of the company’s bonus plan, she is also entitled to receive $40,000. However, while she had elected to receive only $10,000, the unpaid balance being credited to Fiona’s account in Australian Software Pty Ltd’s books on 30 June 2019 was paid to her on 5 September 2019.
Following her departure from Sweden on 1 September 2018, Fiona rented out her own house in Sweden at $5000 (in Australian dollars equivalent) per month. On 5 July 2019, Fiona received a notice from her agent that rent received up to 30 June 2019 amounted to $55,000 (in Australian dollars equivalent), of which $5,000 was related to the month of July.
A statement of account from her Swedish bank indicated interest deposited in her bank account was $2,500 (in Australian dollars equivalent), of which $1,500 was related to the period from 1 September 2018 to 30 June 2019.
REQUIRED
1. Advise Fiona on what amounts may be included in her Australian taxable income for the 2018/19 tax year. (20 Marks)
2. Calculate the assessable income which Fiona need to declare in her income tax return. (5 Marks)
DEPARTMENT OF ACCOUNTING
AND CORPORATE GOVERNANCE
ACCG924 Taxation Law
Session 1 2019
Case Study
Information and Instructions
• Weighting of this assessment task: 25%
• Format of submission: Microsoft Word document, 12-point type, double spaced.
• Method of submission: on-line, uploaded to iLearn
• Due date and time: Friday, 3 May 2019, at 11pm.
• Your written response to this assignment must be presented in a report format. Bullet points are not acceptable.
• Responses to this assessment task must not exceed 2,000 words.
• No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for special consideration is made and approved. No submission will be accepted after solutions have been posted.
IMPORTANT:
? You must cite relevant cases, ATO rulings, and legislative references – (as footnotes) – to support your answers.
? Your response must also provide reasons that explain and support your answers.
BACKGROUND INFORMATION
Fiona Johnson is a well-known software designer, who was born and lived in Sweden. On 1 September 2018, she arrived in Sydney on an unrestricted work permit to take up a job with Australian Software Pty Ltd for a period of eight years. As an incentive to join this company, Australian Software Pty Ltd provided her with two airline tickets and vouchers for a holiday in London valued at $10,000. She was also offered $150,000. This was to be paid in two instalments - $75,000 on joining the company and $75,000 after one year of service. In addition, Fiona will also receive a lump sum payment of $200,000 if she resigns or is terminated. The condition is that she cannot set up a business in Sydney in competition with Australian Software Pty Ltd for five years after resignation or termination.
On 1 June 2019, Fiona sold the following assets in order to purchase an apartment in Sydney:
• 20,000 shares in a Swedish company: acquired on 1 July 1984 at cost of $5,000. The market value was $20,000 on 1 September 2018 and was sold for $25,000 on 1 June 2019.
• An investment flat in Sweden: acquired on 15 July 2018 at a cost of $185,000. The market value was $200,000 on 1 September 2018 and was sold for $210,000 on 1 June 2019.
• An investment property in Melbourne was sold for $550,000 on 1 June 2019. She acquired this property for her daughter who was studying at the University of Melbourne. She paid $300,000 on 1 April 2016 to acquire the property. The market value of the property as at 1 September 2018 was $500,000.
For the year ended 30 June 2019, Fiona received $150,000 by way of salary. As part of the company’s bonus plan, she is also entitled to receive $40,000. However, while she had elected to receive only $10,000, the unpaid balance being credited to Fiona’s account in Australian Software Pty Ltd’s books on 30 June 2019 was paid to her on 5 September 2019.
Following her departure from Sweden on 1 September 2018, Fiona rented out her own house in Sweden at $5000 (in Australian dollars equivalent) per month. On 5 July 2019, Fiona received a notice from her agent that rent received up to 30 June 2019 amounted to $55,000 (in Australian dollars equivalent), of which $5,000 was related to the month of July.
A statement of account from her Swedish bank indicated interest deposited in her bank account was $2,500 (in Australian dollars equivalent), of which $1,500 was related to the period from 1 September 2018 to 30 June 2019.
REQUIRED
1. Advise Fiona on what amounts may be included in her Australian taxable income for the 2018/19 tax year. (20 Marks)
2. Calculate the assessable income which Fiona need to declare in her income tax return. (5 Marks)
Comments
Post a Comment