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Taxation Law Deferred exams

Q1 J i mi sau n i v e r s i t yl a wl e c t u r e rwh oa l s op r a c t i c e si n d e p e n d e n t l ya sab a r r i s t e r . Hei s p r o v i d e dwi t ha nOffic ea t t h eu n i v e r s i t yb u t d o e sn o t h a v es e p a r a t ec h a mb e r sa sh ei s n o t o f t e nr e q u i r e dt oa t t e n dc o u r t . Hed o e s , Ho we v e r , u s e dt h ef r o n t r o o mi nh i sh o u s e a sa nOffic ef o r p u r p o s eo f h i swo r ka sab a r r i s t e r .Th e r ea r et o t a l n u mb e ro f 8r o o msi n t h eh o u s e , s p a n n i n gat o t a l fl o o ra r e ao f 6 0 0s q u a r eme t r e s . Th es i z eo f t h er o o mi n wh i c ht h eo ffic ei sl o c a t e di s3 5s q u a r eme t r e Re q u i r e d : As s u mi n ga l l c o r r e c t i o nd e ma n di np l a c e J i ms p e n t $3 3 0 0o nt r a v e l l i n ge x p e n s eb e t we e nu n i v e r s i t ya n dh o me . Hee s t i ma t e st h a t 3 0 %o f t r a v e l l i n gt i mei n v o l v eg o i n gh o met ome e t wi t hh i si n s t r u c t i n gs o l i c i t o ra n dc l i e n t r e g a r d i n gu p c o mi n gc a s e s . Th eh o u s ei nwh i c hJ i mh a sh i so ffic ei smo r t g a g et ot h eb a n k( NAB) . Th emo r t g a g e c o s t s$ 4 2 0 0p e rmo n t hwi t hwa t e r , e l e c t r i c i t ya n dc o u n c i l r a t ec o s t i n gat o t a l o f $ 5 0 0p e r mo n t h J i mp u r c h a s eaJ a b o t , g o wna n dwi gwh i c hmu s t b ewo r nwh e n e v e rJ i ma p p e a r si n c o u r t . Th e s ec o s t r e s p e c t i v e l y$6 0 , $4 5 0 , a n d$2 0 0 0 . J i mPu r c h a s eSh e l v e sf o rh i sOffic ec o s t i n g$ 8 0 0(wi t ha ne ff e c t i v el i f eo f 1 0y e a r s)a p h o t o c o p i e r / p r i n t e rc o s t i n g$ 2 0 0 0(wi t ha ne ff e c t i v el i f eo f 4 y r s) Re q u i r e d : Ad v i s eJ i mo f Hi st a xc o n s e q u e n c e si nr e l a t i o nt ot h ea b o v ee x p e n s e

Q2 Ry a na n dHa y l e ya r ema r r i e da n do wnf o u r( 4 )i n v e s t me n t p r o p e r t i e si nSy d n e ywe s t . Ry a nwo r ka sap r o f e s s i o n a l a n da l s oa t t e n d st oa l l ma i n t e n a n c ef o rt h ev a r i o u s p r o p e r t i e sa n dc o l l e c t t h er e n t . Ha y l e yd o e st h eb o o ka n da c c o u n t , i s s u e si n v o i c e sa n d l o o ka f t e rt h e i rt woc h i l d r e n . Th e ya g r e ei nwr i t i n gt os p l i t t h ei n c o mef r o mt h ei n v e s t me n t p r o p e r t i e s8 0 : 2 0i nf a v o u ro f Ha y l e ywi t ht h el o s s e sb e i n gs p l i t 8 0 : 2 0i nf a v o u ro f Ry a n . Th ea c c u mu l a t e da c c o u n t sf o rt h ep a r t n e r s h i pf o rt h ey e a re n d e d3 0 / 0 6 / 1 7a r ea s f o l l o w Re n t f r o mt h ef o u r( 4 )p r o p e r t i e s $3 5 0 , 0 0 0 Re p a i ra n dma i n t e n a n c e $1 2 0 , 0 0 0 Sa l a r yt oHa y l e y $3 5 , 0 0 0 Ca re x p e n s e $2 5 , 0 0 0 Du r i n gt h ey e a re n d e d3 0 / 0 6 / 1 7 , Ry a na l s or e c e i v e d$ 5 0 , 0 0 0i n c o me sf o rh i sme a t p r o c e s s i n gwo r ka n d$1 0 , 0 0 0i nf u l l yf r a n k e dd i v i d e n d s . ( 1 )Ad v i s ewh e t h e rRy a na n dHa y l e yc a ns p l i t t h ep r o fi t i nt h ema n n e ra g r e e df o rt a x p u r p o s e s . ( 2 )Ca l c u l a t et h et a xp a y a b l e( r e f u n d a b l e )b yRy a na n dHa y l e yi g n o r i n gMe d i c a r e l e v y

Q3Hy u n d a i ( Au s . )Col t d( HACL ) i st h eh i g h l ys u c c e s s f u l Au s t r a l i a ns u b s i d i a r yo f t h e we l l –k n o wnKo r e a nc a rma n u f a c t u r e r , c o mp a n y( HMC) . I t i mp o r t c a r sf r o mi t sJ a p a n e s e p a r e n t a n ds e l l st h e mi nAu s t r a l i a . i nAu g u s t 2 0 1 6t h eAu s t r a l i a nGo v e r n me n t a n n o u n c e d t op r o p o s a l t oi mp o s eaq u o t ao nt h en u mb e ro f c a r st h a t c a nb ei mp o r t e df r o mKo r e a . I n t u r nHACLs p e n d$ 4 5 0 , 0 0 0i nt h ec u r r e n t y e a ro na d v e r t i s e me n t i nt h eAu s t r a l i a nme d i a a t t a c k i n gt h ep r o p o s ep o l i c ya n du r g i n gp u b l i ct op e t i t i o np a r l i a me n t n o t t op a s st h en e w l a w. Th ea mo u n t s p e n t d o u b l ewa sfi v et i me st h ec o mp a n yn o r ma l a d v e r t i s i n g e x p e n d i t u r e . Re q u i r e: wi t hr e f e r e n c et ol e g i s l a t i o n, c a s el a wa n dt a xr u l i n g(i f a n y ) , Di s c u s st h e d e d u c t i o no f t h ea d v e r t i s i n ge x p e n d i t u r ei n c u r r e db yHy u n d a i Au s t r a l i aCo r p o r a t i o n L i mi t e d( HACL ) Pa r t B Di s c u s swh e t h e rad e d u c t i o nwo u l db ea l l o we df o rt h ef o l l o wi n g . y o u ra n s we rmu s t b e s u p p o r t e db yr e f e r e n c e st or e l e v a n t l e g i s l a t i o na n dc a s el a wa n do rt a xr u l i n g . i ) i i )

Th es a l a r yo f ah o u s ek e e p e re mp l o y e db yt a x p a y e rwh oc o n d u c t sab u s i n e s s f r o mh o mewh i c hd e ma n d sa t t e n d a n c ei nt h ec i t yd u r i n gt h ed a y T r a v e l l i n ge x p e n s ei n c u r r e db yac a s u a l s c h o o l t e a c h e ri nu s i n gh e ro wnc a rt o t r a v e l f r o mh o met ov a r i o u ss c h o o l a t wh i c hs h ewa sr e q u i r et ot e a c h . Th et a x p a y e rwa sn o t i fi e di nt h emo r n i n gb yt h ed e p a r t me n t o f e d u c a t i o nwh os c h o o l s h ewa se x p e c t e dt ot e a c ha t

Q4Y a s mi nr u n sa no n l i n eb a k e r ywh i c hs p e c i a l i s e si nt h ed e l i v e r yo f f r e s hl o v e sa n d b r e a dr o l l st oi t ss u b s c r i b e r s . Th eb a k e r yb u s i n e s si sr e g i s t e rf o rGST . Y a s mi ni n c o me a n de x p e n s e sf o rt h eq u a r t e re n d i n g3 0ma r c h2 0 1 8a r ea sf o l l o ws : Sa l e so f b r e a dl o a v e sa n dr o l l s

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Ca l c u l a t et h eGSTp a y a b l eo rr e f u n d a b l ef o rt h eq u a r t e re n d i n g3 0ma r c h2 0 1 8 . Y o u mu s t r e f e rt or e l e v a n t l e g i s l a t i o na n dc a s el a wi ny o u ra n s we r .

Q5i nh e rwi l l , Ev e l i n e , wh op a s s e da wa yi nJ a n u a r y2 0 1 6 , l e f t h e re s t a t ei nt r u s t f o rt h e b e n e fi t o f h e rd a u g h t e r , Ama n d a , a n dAma n d at woc h i l d r e nEv a( 2 0y e a r so l d )a n d Ra y mo n d( 1 5y e a r so l d) . Ama n d awa sa l s ot h et r u s t e eo f t h et r u s t .Th et r u s t a c c o u n t f o r t h ey e a re n d e d3 0/ 0 6 / 1 7wa sa sf o l l o ws : Ne t i n c o me F u l l yf r a n kd i v i d e n df r o mBHP I n t e r e s t f r o md e p o s i t wi t hL l o y d sb a n k s , L o n d o n Bl a c ko f u n i t i nCr e mo r n e Ma n a g e me n t f e e L o d g e me n t o f i n c o met a x

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At t h ee n do f t h e2 0 1 7fi n a n c i a l y e a rt h et r u s t e ed e t e r mi n e st h a t Ev aa n dRa y mo n d s h o u l de a c hr e c e i v e d4 0 %o f t h en e t i n c o meo f t h et r u s t . Bo t hc h i l d r e na r eAu s t r a l i a n r e s i d e n t f o rt a xp u r p o s e s . Ra y mo n di sf u l l t i mes t u d e n t a n dh a sn o t r e c e i v e da n yo t h e rs o u r c e so f i n c o me . Ev a wo r kp a r t t i mea n dr e c e i v e dag r o s ss a l a r yo f $5 5 , 0 0 0 . Pa ya sy o ug o( P A YG)t a x , wh i c hwa sp a i db yEv a ’ se mp l o y e ro nh e rb e h a l f wa s$1 2 , 2 3 3 Ama n d ai ss e l f e mp l o y e da n de a r n e d$1 3 00 0 0f o rt h ey e a re n d e d3 0 / 0 6 / 1 7 . Re q u i r e d: Di s c u s st h et a xc o n s e q u e n c e sa r i s i n gf r o mt h ea b o v ef a c t s , i n c l u d i n gt h e a mo u n t o f t a xp a y a b l eb yt h ev a r i o u sp a r t i e s .Re f e r e n c et or e l e v a n t l e g i s l a t i o na n do r c a s el a w.

Q6p a r t A: Th ec o mmi s s i o n e ro f t a x a t i o no ffic ed e c i d e st oi n v e s t i g a t e st h et a x a t i o n a ff a i r so f t h ef a mi l yt r u s t f r o mq u e s t i o n5a b o v e . Hes e n d st woo ffic e r sf r o mt h e Ch a t s wo o do ffic e so f Ah e a d&Wa l l y(A&W) , t h ea c c o u n t a n ta d v i s e r sAma n d a e n g a g e dt op r e p a r e dt h et a xr e t u r nf o rt h et r u s t f o rt h ey e a re n d e d2 0 1 7 . Wh i l ea t t h e o ffic e so f A&W, t h eo ffic e r sd i s c o v e rt h a t mo s t o f t h er e c o r d sa r ek e p t o nc o mp u t e r a n dt h e r ei sn oh a r dc o p y . Ho we v e r , A&Ws t a ffr e f u s et oa s s i s t t h eo ffic e r sc o p p yt h e r e l e v a n t i n f o r ma t i o no n t ot h eo ffic e ro wnd i s k e t t e . So meo f t h ema t e r i a l c o p i e d i n c l u d el e g a l a d v i s e dt h a t A&Ws o u g h t i nr e l a t i o nt op r o p o s e dt r a n s a c t i o nwh i c ht h e t r u s t u l t i ma t e l y , d i dn o t p u r s u e . Re q u i r e d : I ) I I )

Di s c u s swh e t h e rt h ec o mmi s s i o n e r ’ so ffic e r sa r ea u t h o r i s e dt oma k ec o p i e so f A&W’ sr e c o r d sa b o u t t h et r u s tAn d Wh e t h e rA&Ws t a ffwe r er i g h t t or e f u s ea s s i s t t ot h et a xo ffic e r s , a n dwh a t s h o u l dt h e yh a v ed o n ei nt h ec i r c u ms t a n c e s

Pa r t BTh ec o mmi s s i o n e ro f t h et a x a t i o ni s s u e sAma n d aat r u s t e eo f t h et r u s t i n Qu e s t i o n5a b o v ewi t ha na me n d e da s s e s s me n t u n d e rp a r t I VAo f t h ei n c o met a x a s s e s s me n t ACT1 9 3 6wh i c hr e d u c e dt h ed e d u c t i o na l l o we df o rma n a g e me n t f e et o $ 2 , 0 0 0 . Ex p l a i nb yr e f e r e n c et ol e g i s l a t i o na n dc a s el a wwh e nt h ec o mmi s s i o n e rc a ne x e r c i s e p o we ru n d e rS1 7 7 Fo f t h ei n c o met a xa s s e s s me n t ACT1 9 3 6t oi s s u ea na me n d e d a s s e s s me n t ....